Long-Short setup for IBM
Trendlines offer a broader perspective, helping identify larger price trends. On the chart, two primary trendlines emerge:
Dashed Downtrend Line: Short-Term Resistance
The dashed blue line, constructed from 1-hour candles over the past three months, has acted as a critical resistance in the short term. Recent price action indicates that the stock is struggling to breach this line, reinforcing bearish momentum. The expectation is as follows:
Break Below the Dashed Line:
If the price decisively breaks below the dashed blue line, it would signal the continuation of the short-term bearish trend. This could lead to accelerated selling pressure, pushing the stock lower.
Implications of the Break:
A breakdown would align the shorter-term trend with the long-term green channel, suggesting that the price might seek support at the lower boundary of the green ascending channel.
Green Ascending Channel: Long-Term Support
The green ascending channel, derived from daily candles, represents the stock's broader bullish trend. The lower boundary of this channel serves as a critical support zone:
Target for the Decline:
Once the price breaks below the dashed blue line, the expectation is that it will move toward the lower boundary of the green channel, where long-term buyers might re-enter the market.
Support Strength:
Historically, the lower boundary of the green channel has acted as a robust support, providing strong bounce opportunities. A touch at this level would likely present a favorable entry point for long positions in alignment with the long-term uptrend.
Dashed Downtrend Line: Short-Term Resistance
The dashed blue line, constructed from 1-hour candles over the past three months, has acted as a critical resistance in the short term. Recent price action indicates that the stock is struggling to breach this line, reinforcing bearish momentum. The expectation is as follows:
Break Below the Dashed Line:
If the price decisively breaks below the dashed blue line, it would signal the continuation of the short-term bearish trend. This could lead to accelerated selling pressure, pushing the stock lower.
Implications of the Break:
A breakdown would align the shorter-term trend with the long-term green channel, suggesting that the price might seek support at the lower boundary of the green ascending channel.
Green Ascending Channel: Long-Term Support
The green ascending channel, derived from daily candles, represents the stock's broader bullish trend. The lower boundary of this channel serves as a critical support zone:
Target for the Decline:
Once the price breaks below the dashed blue line, the expectation is that it will move toward the lower boundary of the green channel, where long-term buyers might re-enter the market.
Support Strength:
Historically, the lower boundary of the green channel has acted as a robust support, providing strong bounce opportunities. A touch at this level would likely present a favorable entry point for long positions in alignment with the long-term uptrend.
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