Following up on another stock, namely Cern which I posted about 3oth April when the stock was trading at $65.88 per share:
So where next for Cern, and here two things are key. First, we need to see the price continue to break away from the volume point of control (VPOC) on rising volume and clear the top of the volatility indicator in the $66 area but expect to see some consolidation first. Once through here the $67.57 level of August last year becomes the next objective, and finally, if this is taken out, a longer-term return to the $74 area. The region from $66 to $74 is also key for another reason, as volumes on the VPOC indicator are falling away the higher we move, thereby presenting less resistance to the advance which is confirmed with the trend monitor below.
And this is precisely where we are following last week’s solid price action for the stock which closed with a wide spread up candle and closing at $72.74 on Friday. The key now for the ‘longer term’ is whether the highs of October and December 2018 will now be taken out in the $74 per share region. It was at these levels the stock reversed with volume confirming the weakness on each occasion.
However, there are some very positive signs which suggest we will not witness a triple top. First, volume on the volume point of control histogram is once again thin with low and falling volume immediately ahead, suggesting the price will move through here rapidly. Second, we have two minor price based resistance levels, which were both cleared last week and denoted with the red dashed line. Third and last, the trend monitor remains bright blue confirming the continued bullish momentum for this stock. And with US equity markets looking to make further gains driven by the broader fundamental landscape, along with an easing in the trade wars with Mexico, this week may see the stock climb through these and so on to the next level at $74 per share and beyond.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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