Potentially with the broader market having topped in 2015 based on our big picture view, the current rally from Feb 2016 low might be bounce rather than new bullish cycle suggesting the upside is limited.
With that background ADOBE could be close to completing its bullish cycle which commence from the 2011 low. The price action from 2000 high to 2011 low could be "Running Flat".
Please see the video for detailed explanation Link -
www.danv-charting.co...1Eku28uFeHE4n8M.html
If this is correct then Adobe has been relatively strong Vs the NASDAQ Composite and it has an earnings announcement due on 17th March 2016 which could be better than market has estimated and would result in this being used for sharp mark up and spike into 100 area offering potential short opportunity.
Here is the technical summary (also shown on the chart):
1. Relative Strength with Nasdaq Composite might result in double top or price divergence with peak in 2008 and current one being formed.
2. The 238.2% fib extension of price swing from 2000 high to 2002 low = $93 and similarly, 261.8% = $101
3. The 238.2% of 2007 high to 2009 low = $98
4. On monthly chart a clear RSI divergence and MACD with likely double top (divergence in histogram)
5. Falling volume from March 2014 leading up to current top suggest the move is running out of momentum.
Conclusion:
If the above technicals play out then a correction back towards lower range of the rising trend channel (on Log Scale) in the proximity of $50 area is likely. To trade this potential weakness and suggested Options Trade could be considered.
Action:
Jan 2017, $50 PUT for around $0.50 (presently around 0.81 - 0.91). Either a limit order or after the earnings announcement and price reaction the order could be worked for close to $0.5.
If we have gap down then a review of the trade would be necessary.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
With that background ADOBE could be close to completing its bullish cycle which commence from the 2011 low. The price action from 2000 high to 2011 low could be "Running Flat".
Please see the video for detailed explanation Link -
www.danv-charting.co...1Eku28uFeHE4n8M.html
If this is correct then Adobe has been relatively strong Vs the NASDAQ Composite and it has an earnings announcement due on 17th March 2016 which could be better than market has estimated and would result in this being used for sharp mark up and spike into 100 area offering potential short opportunity.
Here is the technical summary (also shown on the chart):
1. Relative Strength with Nasdaq Composite might result in double top or price divergence with peak in 2008 and current one being formed.
2. The 238.2% fib extension of price swing from 2000 high to 2002 low = $93 and similarly, 261.8% = $101
3. The 238.2% of 2007 high to 2009 low = $98
4. On monthly chart a clear RSI divergence and MACD with likely double top (divergence in histogram)
5. Falling volume from March 2014 leading up to current top suggest the move is running out of momentum.
Conclusion:
If the above technicals play out then a correction back towards lower range of the rising trend channel (on Log Scale) in the proximity of $50 area is likely. To trade this potential weakness and suggested Options Trade could be considered.
Action:
Jan 2017, $50 PUT for around $0.50 (presently around 0.81 - 0.91). Either a limit order or after the earnings announcement and price reaction the order could be worked for close to $0.5.
If we have gap down then a review of the trade would be necessary.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
