Here's a trade setup I've been waiting for to get ripe for a while. ZIM: the dividend IPO pump n dump darling.
It has some ridiculous fundamentals with currently a book/share of 48.4 and a cash/share of 26.12 along with a crazy 166% dividend: finviz.com/quote.ashx?t=ZIM&p=d
It has been following this linear regression trend on the way down, just as well as on the way up. And now it is making a large wedge (orange) that looks to me like it is ready to breakout soon.
We also got some positive divergence on the MACD and RSI. There's also a long-term resistance line developed on the RSI that I'm watching as potential resistance. One of the RSI lines will have to be broken in the coming months and I'd expect that'll be a big move in what ever direction that will be.
Now as for bearish patterns, it is forming a pattern that looks like a bear flag (blue), so there is the risk of the flag being broken and it continues the trend lower. This one also likes to gap up and down, so there is the risk of stopping out lower than my stop.
If it breaks out, I'm hoping for a rally to the low 20s and will exit there, as it will be hitting the top of the regression trend, increasing risk substantially. You can also see there are a lot of bag-holders at that price based on the Fixed Range Volume Profile so they will likely want to sell at those prices.
My stop is quite loose at 15.78 since zim is a wild one, and if it's going to be an uptrend, I would not expect it to go much below the previous lows.
If my target is reached, I'd then watch on the sidelines to see if it is primed to break out of the regression trend, creating an epic rally. The broader market conditions will have to be in a good situation next year for such an event to happen.
I got a bit excited this morning and bought at 17.41, now it is an even lower price, closer to where I originally wanted to buy lol. But the risk-reward ratio I have for myself is 2.55, not too shabby!
Note: I chart this with the chart adjusted for dividends because they make such a large impact on the chart and I've noticed that my old zim chart is now all messed up because of this, so the published chart appears to get less accurate as time goes on.
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I raised my stop to 16.64 with the potential breakout of this horizontal consolidation that has been going on, as I don't think it should get to those levels now if it plans to be bullish.
ZIM has been underwhelming so far and the market is overbought on the hourly time frames, so it is in a bit of a crappy situation if there is a bit of a technical pull back in the market.
My sell target may have to be lowered to just under 20 too unfortunately as the regression trend is getting closer and will act as resistance. Essentially, the longer ZIM takes to do a rally, the less high I expect it goes up.
The most ideal situation is for ZIM to hold above the gap at 17.90, but I think it is too soon to put a stop in that area as Mr. Market Maker will likely want to have some fun with messing with retail there.
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ZIM had a very good close this week, the weekly and 2 weekly candles look primed for a good run to come. I also looked at an alternative view of the chart and am more optimistic than in my last post. My targets remain largely the same though.
I used log view and my hull + super trend combo to see this nice set up. From my own observations, I've noticed that if the super trend is flat for a long time and the price starts to move up towards it, then a strong breakout is likely. You also want to see the hull giving strong support when it is in this period.
This could end up being a very fast squeeze and then dump as fast as it goes up, but I think it should be stronger than what was seen in mid Nov because of this accumulation pattern.
My two sell targets are 19.64, and if it looks strong it could make it to 21.80 before any big pullback. It could time these targets with the regression trend in my other chart too if it moves fast enough.
Trade closed: target reached
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I have sold ZIM just now at 19.13. Market went up nicely today and is hitting some resistance, so I'm hoping to buy back ZIM again after a short pull back to try to swing it. Perhaps this will be a wrong move, but it is very overbought on shorter time frame already.
Zim is also hitting this resistance line that I've been watching (thick line):
I'll let you know my buy back targets later as more info develops.
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I'm still unsure about the ZIM re-entry. The entire market already seems to be running hot, including ZIM with that fast rally it had. People that were bearish at the bottom are also now screaming melt up on twitter. That's why I decided to exit and wait on the sidelines for a bit. I still think the market hasn't cooled off enough to jump back in though.
On the bullish case, the market could be about to continue to break out of some critical resistance that could technically end the bear market and cause FOMO, so things would stay overbought for a while if such a thing happens. So yeah it's not a clear cut situation to me atm.
On the hourly, ZIM has some overbought indicators that I'd like to see fall down, and then have the price find support around 17.50 to 17.90.
There is potential though that the orange line that has acted as resistance to be the strong support going forward, so ZIM may not get to those levels and instead stay above 18.17. We already seen this line tested today and ZIM was bought up before it even got close.
You also have to watch out for a potential second peak at the thick line that will mess with bulls and then a real pullback happens, keeping an eye out for bearish RSI divergence is key in that situation. A move like that would likely happen in the morning and then reverse an hour later.
Then there is the possibility that if the thick line is broken, it would make a fast squeeze to 20 or higher. If such a thing happens, I may buy it if I feel like gambling and then just keep a very tight stop about 2% under the thick line.
With my other chart, it shows similar ideas. It could pullback to the HULL which could bring it to the 17.80 area. Or the super trend level could act as continued support at 18.30
So sorry I don't have a confident answer on what to do! I found it is best to sit out when I'm unsure until more patterns develop to paint a clearer picture. This consolidation period I'm watching for could take until later Jan to finish.
Now just a warning, if it does pullback to the 17.50 area and still keeps going down below 17.00, then that would make me believe that ZIM is done in this zone and will trend lower. It would be the classic super trend fake out fuckery pattern. But lets wait and see if it can even get to 17.50 first. haha
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Ok with this gap down and break of 18.17, I think ZIM looks like it will do a steep fall so the 17.50s look like a possible target today.
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My bid was missed by a few pennies, always fun when that happens! So I haven't entered ZIM yet.
I raised my bid to 17.60 now, since there seemed to be a lot of interest at that price. I will not chase, it isn't worth it to me to chase.
I'm basically betting on that the new playing field is between these two thick blue lines and not the horizontal orange lines or the red support line between the two.
I'm not much of an Elliot waver, but I am wondering if there is a potential of an abc correction that would find support at the red line. That's why I won't chase, because I'll want my stop below the orange and red line in case I'm wrong.
There is a gap at 17.51-60, that's also why I thought the MM would want to bring it there to fill the gap since they are so obsessed with gaps. So far it bounced before filling the gap, which can sometimes be considered close enough of a fill. I guess it depends what kind of mood they're in, whether they got their powder fix or not.
So that's my outlook. With my luck, this will turn out to be a bull flag and ZIM will hit 18.30 by the end of the day lol.
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I lowered my bid to 17.15 for now since I won't be at my PC today to react if market + ZIM dumps. Reason is I don't like gap n craps and I measured the current length of this crap from the top of the gap and moved the arrow down to where it is holding now and it hits 17.15, which also is the red line support and is also the previous bottom. Lots of coincidences there.
It could get support again at 17.60 with the thick line, but as I said I won't be able to watch as closely today to tell.
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The MM seem to be scamming bears and bulls on this.
So ZIM looks bullish on weekly, bearish on daily, coin flip on 1h to 4h and bullish on 30 min. That's why I'm just sitting out at this point. As Kenny Rogers says, "You gotta know when to hold em."
But I've charted possible paths that I foresee based on conditions of the patterns playing out. We right now have a symmetrical triangle playing out, so very soon the market will choose a direction. Some may want to buy on the breakout of the green resistance line, I prefer for a retest though, maybe at 18. The 30 min stoch has broken out, so that's why it looks bullish on that timeframe to me.
If it breaks down, I'd wait to see if it gets supported on the thick line, if not wait till it hits the red, potentially at 17.22 now.
Then there's the third option where it goes nuts and hits the top again. I'd sell there if I was in it. But since the weekly looks bullish, there's always a potential of a larger trend change and ZIM goes even more crazy. Just look at some other stocks lately, deifying all expectations of the masses.
So yeah, ZIM could go up or down from here. Hope that helps lol.
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To add to the last post, my other chart also shows this cup forming.
So this is what could be throwing me off with the other chart as this curved line is overriding the other lines. Buying when it hits that curve and keeping a stop a few percent below it could be a good strategy. It also shows potential for a good rally into early feb if it stays as support. Still has to cross that green line though.