Ocado has been experiencing a strong pullback on the negative patent litigation news, with what seems like a classic bearish head and shoulders pattern.
The question here is whether the reversal has run out of steam as we try to break out of the multi month downtrend.
Bullish scenario: further lockdowns and festive season online spending act as tailwinds to push the stock past the downtrend, up towards local highs.
Bearish scenario: if the downtrend holds, we can see further downside back to our previous consolidation range. This range should act as strong support.
I'm long OCDO and consider this to be a healthy pullback after strong YTD gains. I would consider adding to my position if support holds around 19.50.
Any thoughts?
Thanks again
(*This is not financial advice, for sake of discussion and illustrative purposes only*)
The question here is whether the reversal has run out of steam as we try to break out of the multi month downtrend.
Bullish scenario: further lockdowns and festive season online spending act as tailwinds to push the stock past the downtrend, up towards local highs.
Bearish scenario: if the downtrend holds, we can see further downside back to our previous consolidation range. This range should act as strong support.
I'm long OCDO and consider this to be a healthy pullback after strong YTD gains. I would consider adding to my position if support holds around 19.50.
Any thoughts?
Thanks again
(*This is not financial advice, for sake of discussion and illustrative purposes only*)
Comment:
We just had a false breakout on monday 21st, will be interesting to see whether 2135 GBX support holds.
Still, 2135 GBX has proven very sturdy support and at our last tap of this resistance OCDO sported a 47 RSI. This could very well pop soon on potential positive news.
I still love this position on a 5-year horizon so this cool-down doesn't worry me too much.