$49 has been an important price level since mid-Feb when it provided resistance for an all time high.
The same $49 level provided strong resistance for the rising wedge , except for a couple of fakeouts marking $51.50 as the new all time high.
Both levels have remained important. $49 was retested shortly after the breakout of the rising wedge . $51.50 provided "long but weak" resistance, with a failed breakout in mid-Aug.
Now we're hanging around $49 again - are we going to keep falling or turn back around? I'm bullish for the following reasons:
- $49 was such a strong resistance that I believe it is just shaking traders out on its way to becoming a stronger support level .
- $49 held support with strong bullish hammers on Jul 22 and Sep 17.
- Even though Sep 18 broke below $49, the next trading day had a strong doji tug of war between buyers and sellers, followed by a green day. IMO this signals a fakeout and not an actual break of support.
- TTM and MACD are juuuuust starting to turn around. Not strong enough to be bullish signals on their own, but in context I would say these are encouraging.
I have the following price targets:
- $51.50 (previous resistance)
- $53.00 (approx previous ATH )
- $57.00 ( rising wedge breakout target, assuming we're still in a "retest" phase and not a "breakdown" phase...)
If we close any day this week below the doji body of $48.50 or so, then I will consider this pattern broken and would then expect more downside. If that happens I will look for another bullish reversal in the $45-$47 range.
The same $49 level provided strong resistance for the rising wedge , except for a couple of fakeouts marking $51.50 as the new all time high.
Both levels have remained important. $49 was retested shortly after the breakout of the rising wedge . $51.50 provided "long but weak" resistance, with a failed breakout in mid-Aug.
Now we're hanging around $49 again - are we going to keep falling or turn back around? I'm bullish for the following reasons:
- $49 was such a strong resistance that I believe it is just shaking traders out on its way to becoming a stronger support level .
- $49 held support with strong bullish hammers on Jul 22 and Sep 17.
- Even though Sep 18 broke below $49, the next trading day had a strong doji tug of war between buyers and sellers, followed by a green day. IMO this signals a fakeout and not an actual break of support.
- TTM and MACD are juuuuust starting to turn around. Not strong enough to be bullish signals on their own, but in context I would say these are encouraging.
I have the following price targets:
- $51.50 (previous resistance)
- $53.00 (approx previous ATH )
- $57.00 ( rising wedge breakout target, assuming we're still in a "retest" phase and not a "breakdown" phase...)
If we close any day this week below the doji body of $48.50 or so, then I will consider this pattern broken and would then expect more downside. If that happens I will look for another bullish reversal in the $45-$47 range.
Trade active:
Today HRL opened and closed above that $49 support, and the MACD lines had a bullish crossover.
Keeping my existing bullish trade open and may add to it if Friday looks good.
Keeping my existing bullish trade open and may add to it if Friday looks good.