This is a Technical Analysis for DocuSign, Inc. (DOCU) on the 1 Week timeframe.
Our current price action is being squeezed by a Symmetrical Triangle.
We are currently testing SUPPORT on the Black trendline.
The space inside the triangle is tight. This move is getting very very close to playing out and may be in the process now.
If we break to the UPSIDE, our 1st target = BLACK Resistance line around $58-59
Our next target would be the RED Resistance line at around $67-68.
If we break to the DOWNSIDE, our 1st target = around $46
Our 2nd target = $41
Now whats more probable? Upside or Downside?
In my opinion, We move to the Downside.
Some evidence exists that i believe will support a downtrend.
Before i continue, i just want to add that Price declines should not be viewed as a negative thing. Its part of the normal nature of the markets. In this case, i think this decline would help support the next move Up in DOCU.
Especially noting that in my opinion, DOCU is trying to set a BOTTOM.
Now notice the RED arrow pointing down. This is my downside target ($41) and what i think will help DOCU's market structure.
If we hit this, it will indicate a DOUBLE BOTTOM formation, which would be a probable area for a bounce. This would also be a catalyst for momentum to enter for price to move towards "MAJOR RESISTANCE" level.
ANother clue that supports my downside targets, is the printing of the Gravestone Doji candle, week of June 5th. This is extremely BEARISH candle pattern. It may have not been priced in yet and we have yet to see the effects of this candle.
To see further signs of what is to come, lets look at the INDICATORS.
Firstly, RSI -> Notice how we are also in kind of a triangle pattern and that its getting tight for RSI as well. We need to see what it does next also, whether breaks to upside or downside. WHich ever direction, it will also coincide with the movements of price.
STOCH RSI -> shows momentum, we are currently in the process of printing a BEARISH cross. If its confirmed, then this could put momentum that pushes price DOWN
ADX -> Is another momentum indicator. Currently we are in this weak momentum zone. We have to watch the interations between GREEN and RED.
If RED moves ABOVE = BEARISH momentum -> this will support a price decline
If GREEN moves ABOVE = BULLISH MOMENTUM -> this will support a price increase
CONCLUSION:
We are in a tightening Triangle pattern, one directions got to give. Whether up or down is yet to be determined. However, my thoughts are leaning more towards a DECLINE. The gravestone doji candle, supports the idea of further decline and creating better market structure would also add to a decline. But a decline is not a bad thing, if we get one. It becomes probable for a DOUBLE BOTTOM and signs of a bottoming out of DOCU.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. When trading always spend majority of your time on risk management strategy.
Our current price action is being squeezed by a Symmetrical Triangle.
We are currently testing SUPPORT on the Black trendline.
The space inside the triangle is tight. This move is getting very very close to playing out and may be in the process now.
If we break to the UPSIDE, our 1st target = BLACK Resistance line around $58-59
Our next target would be the RED Resistance line at around $67-68.
If we break to the DOWNSIDE, our 1st target = around $46
Our 2nd target = $41
Now whats more probable? Upside or Downside?
In my opinion, We move to the Downside.
Some evidence exists that i believe will support a downtrend.
Before i continue, i just want to add that Price declines should not be viewed as a negative thing. Its part of the normal nature of the markets. In this case, i think this decline would help support the next move Up in DOCU.
Especially noting that in my opinion, DOCU is trying to set a BOTTOM.
Now notice the RED arrow pointing down. This is my downside target ($41) and what i think will help DOCU's market structure.
If we hit this, it will indicate a DOUBLE BOTTOM formation, which would be a probable area for a bounce. This would also be a catalyst for momentum to enter for price to move towards "MAJOR RESISTANCE" level.
ANother clue that supports my downside targets, is the printing of the Gravestone Doji candle, week of June 5th. This is extremely BEARISH candle pattern. It may have not been priced in yet and we have yet to see the effects of this candle.
To see further signs of what is to come, lets look at the INDICATORS.
Firstly, RSI -> Notice how we are also in kind of a triangle pattern and that its getting tight for RSI as well. We need to see what it does next also, whether breaks to upside or downside. WHich ever direction, it will also coincide with the movements of price.
STOCH RSI -> shows momentum, we are currently in the process of printing a BEARISH cross. If its confirmed, then this could put momentum that pushes price DOWN
ADX -> Is another momentum indicator. Currently we are in this weak momentum zone. We have to watch the interations between GREEN and RED.
If RED moves ABOVE = BEARISH momentum -> this will support a price decline
If GREEN moves ABOVE = BULLISH MOMENTUM -> this will support a price increase
CONCLUSION:
We are in a tightening Triangle pattern, one directions got to give. Whether up or down is yet to be determined. However, my thoughts are leaning more towards a DECLINE. The gravestone doji candle, supports the idea of further decline and creating better market structure would also add to a decline. But a decline is not a bad thing, if we get one. It becomes probable for a DOUBLE BOTTOM and signs of a bottoming out of DOCU.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. When trading always spend majority of your time on risk management strategy.
Comment:
Update on DOCU on 3 Day timeframe.
We have reached and are hovering ABOVE the Historical Lows Zone.
We have re-traced from our All-time highs to where DOCU stock price was when it first went Public.
If we look left, there is a probability that this could be a Double Bottom Formation. Look to Nov- Dec 2022 where touched this area as well.
RSI is currently printing a Lower Low, indicating that further sell-off can happen.
Notice also the Stoch RSI, we are currently in the process of moving below the 20 level. This also indicates to me further sell-off can happen.
As long as we stay Above the Lower border of the Histoical Low Zone. This would validate the Double Bottom pattern. DOCU can be coming towards a pivotal buy zone. In my opinion.
Important to pay attention to the upcoming weeks. Stay tuned for more updates.
Update on DOCU on 3 Day timeframe.
We have reached and are hovering ABOVE the Historical Lows Zone.
We have re-traced from our All-time highs to where DOCU stock price was when it first went Public.
If we look left, there is a probability that this could be a Double Bottom Formation. Look to Nov- Dec 2022 where touched this area as well.
RSI is currently printing a Lower Low, indicating that further sell-off can happen.
Notice also the Stoch RSI, we are currently in the process of moving below the 20 level. This also indicates to me further sell-off can happen.
As long as we stay Above the Lower border of the Histoical Low Zone. This would validate the Double Bottom pattern. DOCU can be coming towards a pivotal buy zone. In my opinion.
Important to pay attention to the upcoming weeks. Stay tuned for more updates.
We are still showing signs of bottoming out.
im still in the camp of further declines.
We have had a MAJOR rejection off a confluence of RESISTANCE.
1. Overhead Resistance Trendline in Red
2. Support turned Resistance Trendline in Black
We also have printed an ENGULFING Bear Candle on 3 day.
Are currently Below a short term Support line
Are BELOW the 21 EMA
STOCH RSI has also crossed Bearish indication more bearish momentum can push us down.
Watch the current 3 day candle close.
We can potential sweep the lows again.
If we do so, this would be an important area to watch as that may indicate a Double BOTTOM formation.