JMIA Forming New Support for Breakout
Updated
JMIA is currently testing its previous trendline as support(green line).
The candle pattern and standard deviation pertaining to strength of move in relation to volume, indicates that a base has been formed above the previous resistance. If the price action is able to break the current resistance(blue line) formed within the move above the previous trendline(green line), it should test the next overhead resistance along the upper trendline(orange line). The projected strength of this move (based off prior moves showing similar indications) shows the potential to reach the upper trendline resistance(orange line) within the next few weeks with a pullback expected once the price reaches near $79. If the move maintains demand within the market, the price action could see $85.50-$87.75 once the trendline resistance (orange line) is confirmed as a support.
A break below the current trendline support (green line), followed by a rejection of re-entry, shows a probable move to test support of the previous trendline(red line). This is unless it is able to form its own support from and increase in demand above previous levels of buyers entering the market. In my opinion since the $53-$55 demand has already been tested as support, the earliest this demand-formed support could develop above the previous trendline(red line) would be between $49-$51 ($51 support level would indicate strength with it being a 1.13 extension of the previous retracement). The lowest a support should be formed to continue an uptrend would be between $46-$47. This would require that the price had broken down below the previous trendline support(red line) and successfully regained entry from the support. This move would be similar to the trend re-confirmation that happened on 06 Jan 21.
The potential long entries for this trade:
Similar to the move described above, entry could be after a break below the green line and a strong re-entry into the current price range. This would indicate a demand based confirmation of the upper trend.
OR
Entry can be when the price has confirmed support above the demand indicated candle(above the dashed red line).
The indicated potential stop loss would not necessarily be within that range, but within that range after a rejection of re-entry into above trend(green line). Although, waiting for a retest of the green trendline would increase risk as there is no guarantee it will find the demand to retest this resistance.
**This is not financial advice or a suggestion to enter a trade in JMIA, this is just what I am looking for in my own personal entry.
The candle pattern and standard deviation pertaining to strength of move in relation to volume, indicates that a base has been formed above the previous resistance. If the price action is able to break the current resistance(blue line) formed within the move above the previous trendline(green line), it should test the next overhead resistance along the upper trendline(orange line). The projected strength of this move (based off prior moves showing similar indications) shows the potential to reach the upper trendline resistance(orange line) within the next few weeks with a pullback expected once the price reaches near $79. If the move maintains demand within the market, the price action could see $85.50-$87.75 once the trendline resistance (orange line) is confirmed as a support.
A break below the current trendline support (green line), followed by a rejection of re-entry, shows a probable move to test support of the previous trendline(red line). This is unless it is able to form its own support from and increase in demand above previous levels of buyers entering the market. In my opinion since the $53-$55 demand has already been tested as support, the earliest this demand-formed support could develop above the previous trendline(red line) would be between $49-$51 ($51 support level would indicate strength with it being a 1.13 extension of the previous retracement). The lowest a support should be formed to continue an uptrend would be between $46-$47. This would require that the price had broken down below the previous trendline support(red line) and successfully regained entry from the support. This move would be similar to the trend re-confirmation that happened on 06 Jan 21.
The potential long entries for this trade:
Similar to the move described above, entry could be after a break below the green line and a strong re-entry into the current price range. This would indicate a demand based confirmation of the upper trend.
OR
Entry can be when the price has confirmed support above the demand indicated candle(above the dashed red line).
The indicated potential stop loss would not necessarily be within that range, but within that range after a rejection of re-entry into above trend(green line). Although, waiting for a retest of the green trendline would increase risk as there is no guarantee it will find the demand to retest this resistance.
**This is not financial advice or a suggestion to enter a trade in JMIA, this is just what I am looking for in my own personal entry.
Note
Note
First higher selling volume candle than previous green day since Jan breakout. This could be some cause for concern in the possible weakening of the current uptrend.The overall volume today was still on the lower end when compared to the standard deviation of average volume. Indicating the strength of this move still may not be strong enough to take this out of the currently trending channel.
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