MTLS is giving us mixed signals that are proving hard to trade with.
In the longer time frame and on the 4h chart, we can see an evident Regular Bearish divergence. This may explain why MTLS struggled to make ATHs last week despite an outstanding run over the past month or so. However, the daily chart doesn't confirm this bearish divergence, and the continual Higher Highs are making this theory hard to sustain.
Contrarily in the shorter time frame, we now have a Hidden Bullish divergence forming, which may suggest we have found new support on the previous uptrend resistance.
The two scenarios I will be watching closely over the next week are:
1. Confirmation of the Hidden bullish divergence requires a green day tomorrow; 2. If so, there's potential for a Bearish H&S reversal by the end of the week, back down to its lower support and previous horizontal resistance ~$53.
After such a strong run up I'm ever so slightly inclined to the bear case, but any significant pullback will be no less than a great opportunity to add more.
Any thoughts?
Thanks and Good luck to all (*This is not financial advice, for sake of discussion and illustrative purposes only*)
Comment
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The Bearish divergence seems to be really taking hold now, we made another higher high with an even lower high on the RSI. Right shoulder seems to have developed too.
Will be interesting to see whether ~$65.50 holds through tomorrow. If not, out bear case back down to the ~$53 mark.
I thought the same too when I saw the somewhat double top in the hourly time frame, and that it was headed downward, and the slight bearish divergence as well, but we'll see. Always happy to swing trade this monster!! :)
InvestEmi
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@sindadurr, Thanks for your comment, what do you think about the hidden bullish divergence? Am I just confirmation-bias seeing things? hahaha
sindadurr
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@InvestEmi, To be honest, I think it's due for a correction...but this is just an opinion. But it's honestly anyone's guess...this stock is wild lol
InvestEmi
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@sindadurr, No no I definitely agree, it would sure be healthy too. I've been desperately wanting to add too so it would be good. Right shoulder starting to show signs of developing too, could be a harsh drop back down to ~65$ if not all the way back to ~53$ support. Waiting to see how this 4h candle develops!
sindadurr
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@InvestEmi, I'm just sitting back watching this thing....i am currently holding VERY small position just in case it moons but highly doubt it :P. Patience is key!! Do you also trade DDD?
InvestEmi
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@sindadurr, Yea unfortunately for me too, my position is very small in MTLS. No, I steered clear of DDD (for no reason in particular I just preferred MTLS), but I also have a "starter" position in NNDM that I'm looking to add to.
Overall I'm extremely bullish on this sector
sindadurr
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@InvestEmi, Same here !! Yeah I'm waiting for pullback for MTLS before adding more...in the mean time, just twiddling my thumbs.
InvestEmi
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@sindadurr, Price action is kinda following this chart perfectly. Bearish divergence has continued so I think this is going down to ~$53. Will definitely add significantly if it does!