In my previous post on Breadtalk, Quick Post: Breadtalk Still In Uptrend, I mentioned that prices dipping to the 14 day moving average at $0.62 would be a good entry point for those who missed the $0.60 chance.
Lets see how that played out.
Prices indeed bounced off $0.62 support and have now risen to challenge its resistance of $0.65 once again. But the biggest question on my mind is, "Will it succeed?"
The weekly chart shows that the uptrend is still intact, with moving averages aligned properly. However, price has moved higher than the 14dma which has been providing strong support.
Turning to chart patterns:
Here, we continue to see an uptrend but it also seems that a triangle is about to complete its formation. With higher lows and resistance remaining the same, this is the third assault on the resistance.
Volume however has remained low through this which may indicate that the push is weak and that prices may fall back to its 14dma support before a fourth push upwards. That said, with volume remaining so low, it could indicate a lack of not only buyers but also sellers who realize the value of their company and are not letting the shares go without demanding better prices. As such, prices may hover around the $0.65 resistance for a couple of days to allow the 14dma to catch up, completing the triangle formation and breaking out thereafter. Furthermore, a golden cross between the 14dma and 50dma looks to be soon. This may provide the push to break out of the resistance.
Onto indicators:
Despite prices being at the top of the Bollinger Band range, Parabolic S&R indicates buying momentum still present. However, ADX doesn't show any strength in the trend. Furthermore, RSI and Stochastics are in overbought regions which increases the chance of a short term pullback. OBV has been gradually rising which is an indication of accumulation. MFI too has risen higher. It was in oversold regions since mid-Nov. Currently, it is starting to round which may indicate profit taking. Like the OBV and MFI, the MACD is gradually rising as well. However, there is no signal to buy or sell and doesn't look like it'll provide a signal any time soon.
My take: With all the info provided, I personally feel that prices are not going to break through resistance just yet. However, it's looks more and more likely that the resistance will be broken which I expect to happen within the month. The 14dma still provides a good entry point for now to anyone interested. Should the price break resistance, prices are expected to head upwards thereafter.
~K
No comments:
Post a Comment