Dixon chart was discussed in May 22 when price broke down below a head and shoulders bearish pattern. At that time, the pattern targets looked alarming. The pattern target for breakdown were close to 2400-2500 and recent swing low of 2553 is very close to that level. Effectively the pattern target is achieved. Now what?
The slide in stock price has stopped exactly at 61.8% of the entire previous rally. Now we need to see if stock price shows any signs of consolidation/bottoming out at around current levels. After such a big fall, wherein stock price corrected from high of 6243 to 2553, stocks don’t usually reverse direction straightaway. They first form a bottom, undergo consolidation with multiple up and down moves within a range, and then break out above the range indicating that a bottom is in place and another fresh rally has begun. In the chart, price correction may/may not have been over, but time correction is still remaining. So its in watchlist for any potential signs of reversal after few weeks/months of consolidation. ( i.e if it still does not go much lower than current levels. ) disc: no positions.
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