The stock just bounced off the lower trend line and the daily stochastic indicators made a bullish crossover on Friday.
Trending higher over the last five months, it just hit the lower rail of the channel while the stochastic indicators hit oversold territory for the first time since June.
It hit resistance and moved lower in the last few days. The pullback was enough to cause the stochastic readings to make a bearish crossover while in overbought territory.
The underlying stock’s stochastic indicators are in oversold territory and made a bullish crossover last night.
The main driver behind this trade idea is the chart. The stock hit the upper trend line before turning lower yesterday and the stochastic indicators are in overbought territory and made a bearish crossover last night.
The stochastic indicators are showing similar setups to October and July. In both of those cases, the stock rallied nicely over the next month and a half and I look for another strong rally here.
In a five month trend channel, the stochastic indicators hit their lowest level since the end of September before turning higher yesterday.
The underlying stock looks primed to make another move higher.
The underlying stock has been in a downtrend since August and the daily stochastic indicators were in overbought territory as it made a bearish crossover last night.
It hit resistance last week and moved sharply lower on Wednesday. Then the stochastic readings fell and made a bearish crossover on Thursday.