ALK continues to show interesting development on the hourly chart, as it edges toward the apex of a very large bullish falling wedge. Earlier this week, we saw price broke down from a bearish rising wedge in an attempt to take out the downward trend line of the larger bullish wedge. The price bounced off a support level yesterday, before reaching the bottom of the wedge. It is dragged down today by the downward motion of the SPY.
However, apart from the bullish falling wedge technicals, we can see that the price has made a higher high and lower low starting at the bottom of late May. If this is a start of an uptrend, then the hourly RSI and PPO indicator actually display a hidden bullish divergence, as price made a higher low, but indicator made a lower low. This suggests that selling was so hard, but demand from below stops selling from pushing the price down. This means strength in the stock. Notice that the 9 day moving average just crossed the 50, suggesting that the near term trend is down. However If SPY happens to be down next week but ALK is green, then watch for the integrity of the hidden bullish divergence and the upward trending channel. A breakout of the falling wedge may come soon.
However, apart from the bullish falling wedge technicals, we can see that the price has made a higher high and lower low starting at the bottom of late May. If this is a start of an uptrend, then the hourly RSI and PPO indicator actually display a hidden bullish divergence, as price made a higher low, but indicator made a lower low. This suggests that selling was so hard, but demand from below stops selling from pushing the price down. This means strength in the stock. Notice that the 9 day moving average just crossed the 50, suggesting that the near term trend is down. However If SPY happens to be down next week but ALK is green, then watch for the integrity of the hidden bullish divergence and the upward trending channel. A breakout of the falling wedge may come soon.
Comment:
The uptrend is intact. A break above 64.55 would provide a nice long entry. However if price turns around, then we could be looking at 57 level, which may or may not hold. In particular, ALK did not participate the market rally on Friday, which could signal broad market weakness, and that it is likely to be dragged down by the market should the market turn impulsively downward in the coming days.