12-May-2024 : Keeping it Simple with Price Action & Technical...

12-May-2024 : Keeping it Simple with Price Action & Technical Analysis.

The market keeps providing opportunities that can offer big rewards with relatively low risk.
All that is needed is proper sound knowledge of price action and risk management.

Let's look at the Weekly chart of CUV to see the "potential" opportunities that may lie ahead.



What I can see from the higher long term view;
* The stock is at aLONG TERM support zone, a zone that it has respected since 2018.
* Each time in the past, when at this support level, the stock has sharply rebounded. However, this time we are seeing a slow positive consolidation.
* The Orange zones are the resistance zones, that have been tried atleast twice and failed. The zone right now has also been tested, and what remains to be seen to confirm the reversal will be a stop above this last ORANGE zone that sustains and is respected. That will confirm the reversal of trend, and also will complete a reverse heads and shoulders pattern if you visualise that last ORANGE zone as the neckline of the H & S.
* The long term down trend has already been halted, evident from the break of the long term down trend line. It is now expected the stock will consolidate between the GREEN support zone and the last ORANGE resistance zone for a while. Patience will play a key role here, as it may get tested the longer the stock remains in this last consolidation zone. However, any long positive consolidation only bores good for a stock, as the break out from that ( which can be either side ) will be sharp.
Hence ALWAYS put a stop-loss as soon as one enters a stock, because any sound analysis can still be negated by the market.

This stock right now is at Number 20 on the most shorted stocks on MarketIndex list, with a days-to-cvre of 21.6. So you can imagine, a reversal, when it happens will be sudden, that means, it will reverse with a nice GAP-UP, and that short covering will provide the initial impetus for a good up move.

Good luck, and DYOR.. My analysis though in all good intentions, may turn out to be wrong.