JMIA shows sign of reversal to the UPSIDE. At least the Pattern and the recent price actions suggest it.
Why this can be a good pattern? Well, because:
1. Pattern has a very tight PRZ. The range of the zone is only 30 cents wide.
2. The PRZ is right above 200 MA which is very strong support.
3. Pattern completion is not premature and pattern symmetry is around 0.8
4. The price goes sideways for a while. The is also very low. This means that bears are out of breath and they are ready to leave the scene to bulls.
Okay! These are all good things. How about some negatives:
1. The dollar is strong and still wants to go upwards. The DXY wants to test 95 or even higher to me. So, this adds a little doubt to the analysis. On the other hand, this whole time while the dollar gained strength, JMIA didn't sell off aggressively like other tech stocks which is good.
2. The pattern starting points is controversial. This is my biggest concern. I tried to draw this pattern in a few different ways and I think this is the one that makes the most sense. Although there are other possibilities, all the valid patterns suggest a similar PRICE REVERSAL ZONE. Therefore, I don't think that the analysis can be way off.
I am honestly expecting another week of a strong dollar, but I don't expect a long term strong dollar. It is against the policy of the FED and the U.S. government. Therefore, if there is a reversal, I expect it to be a strong reversal. I marked potential profit-taking levels. Make your own decision.
I appreciate constructive feedback! Have a great weekend!