Rakesh Upadhyay

Usually, in a bull market, if the stock languishes near the lows, it is a sign of weakness. Traders prefer to buy strength. Nevertheless, let's see if the stock is showing signs of bottoming out. The stock topped out at $89.38 in Aug. 2015. From there, it fell to a low of $42.68 in Aug. 2017. Repeated attempts to start a new uptrend have faced selling at higher levels. The stock had risen sharply between May and Aug. of last year. However, the recovery stalled close to $73.99. From there, the stock again plunged back towards the supports. Currently, the stock is again attempting to bounce off the strong support. A breakout of the downtrend line is a positive sign. If the price scales $60, we can expect it to ride up to $73.99. On the other hand, if the stock turns down from the current levels, it can fall below the downtrend line and reach the lows at $44. I suggest you wait for the price to breakout of $60 for turning positive.

Walt Disney (DIS) has been largely range bound since hitting a high of $122.08 in Aug. 2015. Let's see whether the probability of a breakout to high is greater or is it forming a topping pattern. DIS has formed an ascending triangle pattern at the highs. The pattern will complete on a breakout and close above $122.08. If that happens, the minimum target objective is $157. Conversely, if the stock breaks down of the trendline of the triangle, it will invalidate the bullish pattern, which is a negative sign. The level to watch on the downside will be $96. If this also breaks down, the final support is at $86.25. Even if this level holds, the stock is likely to become range bound for some more time. But if the price breaks down of $86.35, it will be very negative. We don't see any topping pattern on DIS yet. Rather it is making an ascending triangle pattern.

Twilio has been in a strong uptrend since Feb. of last year. During this period, it has risen sharply from close to $24 levels in early Feb. to $136 on Mar. 21. What is the next target on the stock? The price is above both the moving averages, which are trending higher. The 20-day EMA is above the 50-day SMA and the RSI is in the positive territory. This confirms that the stock is still in a strong uptrend. For now, the stock is rising inside an ascending channel, If the stock stays inside the channel, it will indicate strength. The next target to watch on the upside is $149. The bullish view will be invalidated if the stock breaks down of the channel and the moving averages. In such a case, the stock can drop to $98. So, the view is that the stock is in an uptrend and if it continues to trade inside the channel, it can reach $150. This view will be negated if the bears sink the price below the channel and the 50-day SMA.

Micron Technology topped out on May 30 of last year at $64.66. From there, the stock hit a low of $28.39 on Dec. 26. Since then, the bulls have been attempting to form a base. Has it formed a bottom? Let's see. The stock has formed an inverse head and shoulders (H&S) pattern that will complete on a breakout and close above the neck line. The minimum target objective of this pattern is $56. If the bulls succeed in breaking out of this level, a retest of the lifetime highs will be on the cards. However, preempting and buying before a breakout can be detrimental because on many occasions, the breakout never happens. In this case, if the stock fails to breakout of the neckline of the inverse H&S, it can first slide to 36.57, which is the right shoulder. A breakdown below this support is likely to attract further selling and a drop to $32.66 is probable. Currently, both the moving averages are gradually sloping up and the RSI is also in the overbought zone. This shows that the bulls have the upper hand. But the stock is likely to start a new uptrend on a breakout and close above the neckline. Until then, it remains in a pullback from the lows. The trend will turn down again if the stock slips below the $28.39 low.  

Biogen (BIIB) fell 29.23% yesterday as the company shelved their Alzheimer's trials. The traders just dumped the stock. Let's see if we find any strong support close by or does it have more room to fall?   After the fall, the stock has dropped close to the critical support level of $205.42. The stock has not broken below this level since late 2013, which shows its importance. As the downward momentum is strong, the stock might dip to $179.30 but we expect the zone of $205.42 to $179.30 to attract buyers. The RSI has dropped close to the oversold zone. In the past decade, the stock has always bounced from close to the oversold zone. The RSI never fell below 30 levels. But it is important to note that during that time, the stock was in a strong bull trend or was in a consolidation. Still, as the supports are close, a bounce can not be ruled out. The extent of the rebound will give a better idea whether the bottom is in place or not. From the current levels, the stock might fall about 10% and then rebound.  

The S&P 500 plunged in Dec. of last year but has made a 'V' shaped recovery, pushing price close to the lifetime highs. With the break out of 2816.94, the index completed an inverse head and shoulders pattern, that has a target objective of 3287.3. However, it will not be a one-way move towards the target. We anticipate a strong resistance close to the current lifetime highs. Both the moving averages are trending up and the RSI is close to the overbought zone. This suggests that the bulls are in command. A dip below 2816.94 will find support at the 20-day EMA and below it at the 50-day SMA. If the bears sink the price below the 50-day SMA, it will indicate weakness and can result in a correction to 2600. Below this level, the trend will turn in favor of the bears. Until the index remains above the 50-day SMA, the uptrend and bullish momentum remains intact. Hence, dips can be purchased. If this support breaks, the stops on the existing long positions should be tightened.

Boeing (BA) had a massive run from the Dec. lows of $292.47 to the end-Feb. highs of $446.01. That is a 52.49% increase within a short span of time. So, after such a sharp move, a correction was warranted. Following the adverse news of grounding of the Boeing 737 Max in a number of nations, the stock has corrected sharply in the past two weeks. So, what should be done with it now? Let's find out. Even after the recent fall, the stock has not become negative. The 20-week EMA is above the 50-week SMA and the price is close to the 20-week EMA. This shows that the long-term trend is up, but the flattish 20-week EMA is pointing towards a consolidation in the near term. The stock has completed a 50% retracement of the rally from $292.47 to $446.01. This is a critical support, below which the stock can drop to the 61.8% Fibonacci retracement level of $351.12. We expect the bulls to hold the zone between $369.24-$351.12. If successful, we anticipate the stock to move towards its lifetime highs of $446.01. A breakout to new highs will be a positive indication. However, if the price plunges below $351.12, it can correct to $325.33 and below that to $292.47. Where should you buy? On the daily chart, we find that the 20-day EMA is sloping down and the RSI is close to the oversold levels. This shows that the bears have the advantage in the short-term. However, if the stock can breakout of the downtrend line and rise above both the moving averages, it will indicate strength. You can buy above $403 and keep a stop loss of $360. This suggestion will be invalidated if the stock plunges below $360 before rising. In that case, we will have to change both the buy level and the stop loss. Notwithstanding, the first target remains a move to $446.01. Above this, the uptrend will resume.

The Chinese market has been in focus due to the ongoing trade war with the US that can hurt the economy of both the countries in the long-term. If a favorable deal for both the nations is hammered out, it is likely to be positive for the stock markets of both nations. So, let's see if MCHI looks good to be purchased? On the weekly chart, the ETF is close to the downtrend line of the falling wedge. The 20-week EMA has turned up and the 50-week SMA is also flattening out. This shows that the bulls have an advantage in the short-term. The ETF fell to a low of $50.45 in end-Oct. and successfully retested this level in end-December when it fell to a low of $50.86. This completed a double bottom formation when the ETF rose above the overhead resistance of $59.16. The minimum target objective of the double bottom is $67.46. We, however, expect the rally to reach $72 levels. It can be purchased at $64 with a stop loss below $58 because if the price sustains below $59.16 for long, it can result in a retest of the Dec. lows. However, as the risk to reward ratio is not very attractive, I would suggest you keep the position size at 30% of the usual.      

Nike is a strong stock. Though the index is still below its lifetime highs, Nike has risen to new highs. This shows outperformance. What is the target level to watch on the upside? The stock has been consolidating close to the new highs for the past four weeks. This shows that the bulls are in no hurry to book profits on their positions and are buying on every minor dip. If the bulls scale above $89, it will indicate the resumption of the uptrend. The target to watch on the upside is between $102.53 and $105.53.. Contrary to our opinion, if the stock dips and sustains below $84, it will indicate profit booking at higher levels and can fall to the 20-week EMA, and below that to the 50-week SMA. Such a move will increase the possibility of a consolidation for a few weeks.

Ethereum (ETH) has been in a long bear market. It has plunged sharply from its lifetime highs of $1,419.96 to the current levels. However, for the past few months, the downtrend has stalled. So, is this this a pause before the downtrend resumes or is a trend reversal in the offing? Let's find out. ETH hit a low of $80.6 in early-Dec. of last year. Since then, the cryptocurrency has been attempting to put in a bottom. After such a long bear phase, we expect the digital currency to form a large base, before breaking out from it. The longer the base, stronger will be the eventual break out from it. The 20-week EMA is flattening out and the RSI has been creeping higher, which shows that the bears are losing momentum. Let's see if we can find a buy set up on the daily chart. On the daily chart, we find a bullish ascending triangle pattern developing, that will complete on a breakout and close (UTC time frame) above $160.6. Following the break out, the pattern target on the digital currency is $240.6, but we expect the rally to reach $255. It won't be a one-way rally, as it will face resistance close to $220 and above it at $240. Nevertheless, we expect these levels to be crossed. For an entry, you can buy about 40% of your desired allocation at $148 and the rest above $160. The initial stop loss for both these entries can be kept just below the trendline of the ascending triangle at $115. Currently, both the moving averages are gradually moving up and the RSI is also in the positive territory. This suggests that the bulls have a slight advantage. Our bullish view will be invalidated if the digital currency plunges from the current levels and breaks below the support at $118. Such a move can result in a fall to $100.15 and below it to $80.6.  

MSFT has been on a roll since bottoming out in 2009. Having risen about 691% in the past decade, is it good for more? Let's first look at its weekly chart. MSFT has made a new high, after the December correction. This shows that the stock is outperforming the index A new high is a sign of strength and should be purchased.It has a strong support at the 50-week SMA and just below it at the uptrend line. So, we have a clear stop loss at $93 for the long-term investors, which is just below the Dec. lows. The only thing negative on the chart is the large negative divergence on the RSI. Let's locate the buy and the target level from the daily chart. The stock is presently rising in an ascending channel. Both the moving averages are sloping up, which suggests that the bulls are in the driver's seat. However, the RSI has risen deep into the overbought zone. As the price is close to the resistance line of the ascending channel, it can act as a stiff resistance. If the price turns down from the resistance line, it can dip to the support of the channel, closer to $113. This can be used as an entry point with th stop being kept below the 50-day SMA. The target level to watch on the upside is $138.4. Conversely, if the price doesn't fall below $116.18, it will indicate strength. In such a case, you can buy on a breakout to new highs and keep the stop loss below the support line of the ascending channel.  

YY topped out in mid-Jan. of last year and has since then been on a steady downtrend. It made a low during the stock market correction in December of last year. Along with the whole market, it has also moved up. But let's see if it has bottomed out and is on its way up.   The stock has formed a 'W' bottom and has broken out of it, which is a bullish sign. It can now move up to its target objective of $97. It has also formed another short-term reversal pattern. Let's look at it as well. The second reversal pattern is the inverse head and shoulders formation. The stock has broken out of the neckline of the pattern and is currently at the downtrend line. If it breaks out of the downtrend line, it will start a new uptrend that can move it up to $100, followed by a move to $120. With two reversal patterns, the stock is showing signs of having bottomed out. The analysis will be invalidated if the price turns down from the downtrend line and breaks below the right shoulder. This will increase the probability of a retest of the Dec. lows. So, if buying, please keep the stop loss below the right shoulder and buy on a close above the downtrend line.  

FRT topped out in end-July 2016. Since then, it has been in a downtrend that made a panic low in early-Feb. 2018. Since then, FRT has been attempting to start a new uptrend but is facing selling at higher levels. But can it go up? FRT has been pulling upwards in its recovery that started from below $110 levels. Since then, it has not broken down of this level, which is a bullish sign. Even during the mayhem in Dec. of last year, it found support just above $115. The recovery from the Dec. low was very sharp, which is a bullish sign. It has made an inverse head and shoulders pattern, which will complete on a breakout and close above $138.12. The pattern target following the breakout is $170. There is a minor resistance at $145.8 but it is likely to be scaled. However, if it doesn't breakout of $138.12, it will remain range bound for a few more weeks. Overall, it is looking strong with a good prospect of moving up if it breaks out of $138.12.    

Let's first look at the long-term picture. AUD/USD is currently in a downtrend with the price below both the weekly moving averages. The RSI is also in the negative zone. However, since mid-August, the pair is attempting to form a base. Attempts to sink the pair below the support of the range (colored blue) have failed. This shows buying at lower levels. We like the way the RSI has also formed a positive divergence. So, with these positives, does it look good in the short-term. Let's look at the daily chart and find out. Currently, the pair is trading inside the descending channel. A small positive is that it has not broken down of the channel since early-Jan. of this year. However, on every bounce from the support, it has made a lower high, which is a bearish sign. This shows that the bulls are buying at the support of the channel but the buying dries up at higher levels. After the current bounce, the pair is likely to reach the small downtrend line. If this resistance is scaled, the pair can reach the resistance line of the descending channel. If the bulls succeed in breaking out of the channel, it should pick up momentum. On the downside, a breakdown below the channel will be a negative development that can drag prices lower towards the support line. There is no clear buy setup at the moment.

GE has been a disaster. It is in a strong downtrend and has corrected close to the panic lows of 2009. However, with some news of a turnaround making the rounds, let's see if it is showing a bottoming pattern on the charts as well. The trend on the weekly chart is down. However, we seeing first signs of buying near the lows. The 20-week EMA has flattened out and the 50-week SMA is also flattening out. This shows that the selling pressure has decreased. The positive divergence on the RSI also points to a likely bottom. However, what are the good levels to buy? Let's see on the daily charts. The daily chart shows that the bulls are trying to keep the price above the downtrend line, which is a positive sign. The stock is currently in an ascending channel. If the support line of the channel holds, we expect it to gradually move higher towards $12. With both the moving averages completing a bullish crossover, the path of least resistance is to the upside. You can buy the dip towards $9.4 and below it at $8.5 if it holds for a couple of days. The stop can be kept at $7.5. On the upside, $12 might act as a stiff resistance. Conversely, if GE breaks down of the downtrend line, it will signal weakness and a retest of the lows will be on the cards. Therefore, please don't hold the position below $7.5. This is a risky buy but can become a multi bagger if it turns around. As the risk to reward ratio is attractive, it can be purchased.