NVAX has been making lower lows since 1998, and price is currently falling towards the descending angle. (orange circles) Will it touch it again? If price falls below $3 it will. Looking at the big picture, every time NVAX touched this declining trend line, price went parabolic. How high could price go? Look at the purple channel. Price either peaked at the bottom or the top of the parallel channel. (white circles) It took about six months to three years to go from the bottom of the descending angle to its blow off top. And it saw gains between 10 - 70X.
Where would price retrace to after the blow off top? Look at the yellow parallel channel. Price retraced to the top of the channel, and eventually fell into this channel, bouncing within this range. Prices could never find support on the bottom of the channel, and broke below, falling to the descending angle and creating another lower low. The only exception was in 2012, where price was able to break back out of the channel and reached a blow off top in 2015.
Watch the 21 EMA. (blue moving average) If price bounces off the descending angle, in the future watch when it breaks above the 21 EMA. If price can find support on top of the 21 EMA, it should carry price to its blow off top.
Does a touch of the descending angle guarantee a bounce up to its blow off top in the purple channel? No. But looking at the history of NVAX, it has done this 4 times since 1998.
Could price touch the descending angle, and fall way lower? Sure can. $3.54 is NVAXs all time low. Breaking below this price, which it would if it touched the descending angle, would mean there's no support left to prevent price from falling to the pennies. I'm not saying this would happen, but it's possible, especially when price enters unchartered all time lows.
generational shorting opportunities you mapped out there. great one
AwesomeAvani
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See this link the uptrend of relative strength suggests or forecasts NVAX to retrace the late week downtrend. Stay focused on the big picture instead of this snapshot of bullish divergence leading the way on the microscale
AwesomeAvani
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I suspect NVAX prospects will improve in time especially if COVID V2 happens. Bankruptcy is possible and so is a friendly or hostile takeover. The big players could buy the entire market caps with their reserves (PFE) or get bank help ( MRNA) . In the meanwhile the value is there. Agree downside is possible by breaking through support but reversion to the mean says otherwise. Any takeover will be at a premium. Patience is a virtue and sometimes it is a survival mechanism ( Yes I read the note on your profile !
AwesomeAvani
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Thanks for the excellent analysis it is well headlined as the big picture long views are sometimes the best views. It is especially helpful because it validates my own.
AwesomeAvani
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I published a similar idea and agree wholeheartedly. I know more about this company than your average trader. Hope they can expand as they deserve it. I agree that is is at support bought call options for $17 for January 26 projecting a retrace up into the 40 range in the two years. the calls will pay 49X my my projection of that price- see the idea I took the H&S out with a neckline. I like your megaphone pattern ! My idea linked here
babychester
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@AwesomeAvani, Thank you for your positive feedback. I really appreciate it. I read through your published idea of NVAX. I really like your analysis of the head and shoulder patterns on the weekly. And I agree that this is a long term play with a lot of potential to the upside, if investors are patient enough to wait. In two years people maybe wishing they invested in this stock in this current zone.
AwesomeAvani
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@babychester, NVAX had a good day I think and perhaps many more to come :
Note the Y axis is normalized to 100 to start the day to make it easier to see range percentages.
babychester
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@AwesomeAvani, I was confused at first looking at this chart. I thought you were analyzing a different company. But after reading your note, I see what you did. This is an interesting way of looking at the charts. I'm always trying to learn new things in charting, and this technique will be added to my tool kit. As for NVAX, I feel in the larger time frame it will test my descending angle of sub $3. It's not a popular opinion, and I realize investors on trading view generally don't like bearish charts. If price can find support on the descending angle, then I will be less bearish. And if price can find support on the 21 ema, then I will be very bullish.