rudcharts

CSGP 9/30/2022

Short
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NASDAQ:CSGP   CoStar Group, Inc.
CSGP

Daily chart analysis

It’s crazy to see how overvalued some stocks are, even the good companies.


CSGP was one of the companies born in the last market crash back in 2000-2010.
CSGP went into its uptrend mid 2010/start of 2011 at around 5.00
It continued its uptrend until it topped out at 21.50 in 2014.
Between 2014 thru 2017, price entered a sideways market. It ends up breaking up and out to continue its uptrend. The sideways market is deemed an Accumulation stage.
Price continues to climb during its uptrend until reaching 94.00 on Jul.’20.
Price then starts to move sideways between 79.00-94.00 and in Jan.’22, price breaks down from support of sideways market. The sideways market is deemed a Distribution stage.
Now for the 1st time since mid-2010, price is no longer in an uptrend but entering a downtrend.

After breaking down from support area of 79.00, price fell to 54.00 where it finds support and bounces.
Price pulls back to previous support area of 70.00. Sellers are looking to bounce off previous support and turn it into resistance.
As the price continued to climb during the pullback to previous support, we see the MACD is no longer following the price action. Price kept moving up but is losing momentum as it approaches support of 79.00. This has created a bearish MACD divergence with the price action.
At a level of resistance and losing momentum, expect a reversal. This is my cue to enter trade short.

Will be taking swing to previous lows of 54.00

Entering trade short.

Entry: 69.82
Stop loss: 75.76
Target: 54.50, +21.84%, 2.53 RR ratio
Trade closed: stop reached:
If price falls back below 75, will reenter