Fuqi International (FUQI) followup and buy or sell setup

When the current market move began one of the stocks we recommended taking a position in was FUQI.

Price was bouncing off its 50 MA for the second time during its uptrend. That's usually a buyable event.

The stock made progress but stalled this week. Today it has endured high volume selling although it's trying to find support at its 20 MA.

We wouldn't want to be long FUQI should it correct further from here. And if price closes at the $28.30 level where it stands in late trading it would represent an ugly week and portend a correction. Also, after a second bounce off the 50 MA a stock tends to get tired and less reliable. Even a rocket ship like FUQI. It could well enter another base, especially given how elevated its been above its 200 MA.

But there's another possibility for FUQI this afternoon. It could bounce back and that would be a buying opportunity.

Price has bounced off its bottom and formed a perfect cup with handle on the 5 min chart. A look at the 15 min is interesting. When a stock's rebound attempt is going to fail it is usually turned back at the 20MA, but FUQI has "slipped" past it and the 20 MA is starting to turn higher.

Anything can happen on an options expiration Friday, so we urge some caution. But a break out of this range on the 5 minute chart could be rewarding.