CXO - Has run up last 2 weeks, is the bull run over?!
Hi All!
I noticed this pattern when checking the performance of the Lithium stocks on the ASX today. Core Lithium has been one of the markets favorite lithium stocks on the ASX and has had a great run in the past year. The two bearish patterns observed make's for a short trade.
It reached ATH on 3-Mar (point 1 on the chart), pulled back and continued to make new ATH. After today, it has created a Broadening Top - each new ATH is only marginally higher than the previous high after a short pullback. This is a BEARISH pattern.
To confirm the broadening top bearish pattern - the accumulation/ distribution line (ADL) is also showing a bearish divergence pattern - when the price trends upwards but the ADL is trending downwards. Basically more people are selling than those who are buying, so there is a lack of conviction to keep this rally going. We can expect the price to eventually turn bearish when this is observed.
Placing an order for the following trade to go short - anticipating a move down back close to the previous high volume profile node around 0.81. Taking the TP just before around the level where a previous resistance and support levels are.
I noticed this pattern when checking the performance of the Lithium stocks on the ASX today. Core Lithium has been one of the markets favorite lithium stocks on the ASX and has had a great run in the past year. The two bearish patterns observed make's for a short trade.
It reached ATH on 3-Mar (point 1 on the chart), pulled back and continued to make new ATH. After today, it has created a Broadening Top - each new ATH is only marginally higher than the previous high after a short pullback. This is a BEARISH pattern.
To confirm the broadening top bearish pattern - the accumulation/ distribution line (ADL) is also showing a bearish divergence pattern - when the price trends upwards but the ADL is trending downwards. Basically more people are selling than those who are buying, so there is a lack of conviction to keep this rally going. We can expect the price to eventually turn bearish when this is observed.
Placing an order for the following trade to go short - anticipating a move down back close to the previous high volume profile node around 0.81. Taking the TP just before around the level where a previous resistance and support levels are.
Order cancelled:
Entry at 1.125 never triggered - stock has continued to rally above my short SL point. Also the ADL has recently switched back to following the most recent price movements and the divergence looks to have turned.
Cancelled the trade.
Cancelled the trade.