Hufvudstaden — Bullish: Morning Star, S/R Flip, and more
Hufvudstaden AB is a Swedish, Large-Cap real estate company listed on Nasdaq Stockholm.
BACKGROUND:
- During the severe sell-off in February/March, price traded at approximately -50% at its lowest point, as mesaured from the previous all-time high.
- Throughout summer, price traded in a falling wedge pattern, which eventually broke out to the upside. At this point, as demonstrated in the chart, we see a clear local resistance level at around 132, confirmed by a third rejection at that level in mid-September.
- We are likely seeing a change in market structure, which started with the wedge-breakout in September. We have at least one higher high, and two higher lows, as indicated by the arrows.
- The 132-resistance level was broken in an early-November rally, and that level has seemingly been re-tested and flipped as support. The case of a S/R flip is strengthened by the occurence of a Morning Star pattern, which has formed on the daily chart.
PROJECTION:
- With double local confluences, including a mid-term S/R-level flip and a Morning Star pattern, going long here could be profitable.
- A safer play in the longer-term, however, would be to wait for a proper break of the 140- and 145-levels. 140 constitutes a local double-top from April, confluent with the 38,2% Fibbonaci retracement level from the Feb/March drop.
- 145 is a long-term resistance level, when looking on a multi-month/year time period. Price ranged below that level during +2 years time (2016-2018).
- Clearing both these levels would signal substantial room for upside continuation and price recovery.
BACKGROUND:
- During the severe sell-off in February/March, price traded at approximately -50% at its lowest point, as mesaured from the previous all-time high.
- Throughout summer, price traded in a falling wedge pattern, which eventually broke out to the upside. At this point, as demonstrated in the chart, we see a clear local resistance level at around 132, confirmed by a third rejection at that level in mid-September.
- We are likely seeing a change in market structure, which started with the wedge-breakout in September. We have at least one higher high, and two higher lows, as indicated by the arrows.
- The 132-resistance level was broken in an early-November rally, and that level has seemingly been re-tested and flipped as support. The case of a S/R flip is strengthened by the occurence of a Morning Star pattern, which has formed on the daily chart.
PROJECTION:
- With double local confluences, including a mid-term S/R-level flip and a Morning Star pattern, going long here could be profitable.
- A safer play in the longer-term, however, would be to wait for a proper break of the 140- and 145-levels. 140 constitutes a local double-top from April, confluent with the 38,2% Fibbonaci retracement level from the Feb/March drop.
- 145 is a long-term resistance level, when looking on a multi-month/year time period. Price ranged below that level during +2 years time (2016-2018).
- Clearing both these levels would signal substantial room for upside continuation and price recovery.
