STAA - Likely bottomed out
A downtrend that had reverted to forming a base in the past 2.5 months with "neckline" at 85.50 +/-.
There was a strong gap of abt 10% on 28 March on huge volume which hit right into the horizontal resistence around 85.50 and experiencing some pullback since.
As this is likely a "breakaway gap" (a strong gap that occurs at the begining of a trend reversal), the odds are in favour of a trend continuation in the direction of this gap. (ie up).
One could attempt to go Long at the break of the small pennant that has formed (around 82), however with near term resistence nearby at 85.50, it could be agonising days ahead while it attempts to break above this "neckline". Hence an alternative more "conservative" approach is to wait for the stock to have a close (preferably not too far) above the neckline before staking (ie wait for confirmation of "strength").
Either type of entries has it's merits (and risks). Hence appropriate stop loss (ie money management) is necessary to cut our losses should trade not work out.
Disclaimer: TA is about improving our odds of a successful trade (not a guarantee). This is just my own analysis and opinion for discussion and is NOT a trade advice. Please your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Cheers.
There was a strong gap of abt 10% on 28 March on huge volume which hit right into the horizontal resistence around 85.50 and experiencing some pullback since.
As this is likely a "breakaway gap" (a strong gap that occurs at the begining of a trend reversal), the odds are in favour of a trend continuation in the direction of this gap. (ie up).
One could attempt to go Long at the break of the small pennant that has formed (around 82), however with near term resistence nearby at 85.50, it could be agonising days ahead while it attempts to break above this "neckline". Hence an alternative more "conservative" approach is to wait for the stock to have a close (preferably not too far) above the neckline before staking (ie wait for confirmation of "strength").
Either type of entries has it's merits (and risks). Hence appropriate stop loss (ie money management) is necessary to cut our losses should trade not work out.
Disclaimer: TA is about improving our odds of a successful trade (not a guarantee). This is just my own analysis and opinion for discussion and is NOT a trade advice. Please your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Cheers.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.