TechNerdOmar

Danone, Quick Trade or Long-term Buy. Both work here.

Long
TechNerdOmar Premium Updated   
EURONEXT:BN   DANONE
EURONEXT:BN is showing signs that it has already bottomed out and on its way up. We have a relatively safe trade here.
  • RSI divergence suggests a reversal of trend. It suggests that the low of 29 October 2020 at €46 is the lowest Danone will reach in the short- to mid-term (few months).
  • An ascending triangle is showing upward momentum. This suggests a target of €60.
  • At €60, we see strong resistance that has contributed to major reversals in the past. So that's a line to watch. I suspect a reversal at this line back to the top of the triangle.
  • Just above the €60 line is the 50% Fibonacci level from the recent swing. Crossing this 50% Fib indicates a stronger probability of returning to the swing's top rather than its bottom.
  • If the resistance at €60 is crossed, then it's a very encouraging sign of the bullish momentum and we set our next target at the resistance above at €65.

The trade should go like this:

  • You should go long as soon as the triangle breaks upwards, and set a stop loss at either €51.50 or €50.50 depending on your risk appetite.
  • If the first target of €60 is reached, then we raise our stop loss to the top of the triangle or slightly below it, perhaps at €53.50
  • Once we cross the resistance at €60 by a full daily green candle above it, we raise our stop loss to that level.

Cheers.
Comment:
Reversal off the bottom of the triangle. Looks like a good entry.
Trade closed manually:
It appears Danone is too weak to even break above the first resistance, let alone the farther one I marked 'strong resistance'.
I can't comment on this as a long-term investment, but as a trade, I call it off.

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.