DIVIS labs cmp 2915, has corrected recently from its all time high of 5423 to a swing low of 2740. It took support exactly at a long term trendline drawn on the weekly chart posted below. Another important zone of support we were watching out for was the big unfilled weekly rising gap when stock was going up, which ranged between 2820 to 3012 (marked in dotted blue lines) , which was breached briefly but overall seems to be offering support.
Usually in high quality stocks undergoing medium term correction, support is expected at 200 Week exponential moving average which in case of Divis was at 3275, and it did seem to offer support for a few weeks before the latest bout of weakness which clearly violated the above support zone.
Going forward, i would be keenly watching the falling trendline and any breakout above that if and when it happens. Till that time, it would be wait and watch for me. disc: no positions.
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