The Bottom Line:
- NVDA: Impressive turnaround with a big gap up, now needs to stay above the 50-period moving average at $111.70 to show genuine strength.
- NNC: Forming a bullish pennant pattern, a breakout above resistance could create additional buying pressure.
- LN: Bounced off the support trendline, now needs to stay above $2.78 to maintain the overall uptrend.
- FFI: Needs to stay above the $0.33 mark to show progress and avoid going back to where it was.
- NZE: Sideways action after a pullback could be a leading indicator of the pullback being over and the stock curling back upwards.
NVIDIA’s Impressive Turnaround and Key Support Level
Bouncing Back from Support
NVDA showed an impressive turnaround, wiping away the threat of support being crushed to the downside. The price gapped up and continued to move higher. Moving forward, the ideal level of support to watch is the purple line, the 50-period moving average, currently valued at $111.70. If the price stays above this level, it implies a base and stair steps in the upward direction. In terms of resistance, the key level overhead is the pink line, the 200-period moving average, around $120.
Potential Breakout Opportunity
If NVDA can break through the resistance level at $120, it could create additional buying pressure. While nothing is guaranteed, a tactical breakout above this level is a realistic and rational way to view the chart. Traders who like the stock and the bull pennant pattern should keep an eye on NVDA for a potential breakout opportunity.
Signs of Genuine Strength
The impressive gap up and continued upward movement in NVDA’s price is a sign of genuine strength. If the price can maintain its position above the 50-period moving average, it indicates that the overall trend remains in favor of the bulls. Traders should watch for the price to stay above the $111.70 mark to confirm the strength of the move. A break above the $120 resistance level could open the door for further upside potential.
NNC Forming Bullish Pennant Pattern for Potential Breakout
NNC Forming Bullish Pennant Pattern
NNC, a penny stock, is displaying a solid pattern that could lead to a potential breakout. The bottom part of the pattern is where the consolidation took place, around the $0.258 level. After a significant move up, the price pulled back and then started to move sideways, with a slight upward movement recently.
Key Resistance Level to Watch
The key area of resistance to watch for NNC is the level where the previous upward move stopped. If the price can break through this level, it could create additional buying pressure. This pattern resembles a bull pennant, which is a bullish continuation pattern. While nothing is guaranteed, a tactical breakout above the resistance level is a realistic and rational way to view the chart.
Potential for a Self-Fulfilling Prophecy
If traders who like penny stocks and bull pennants start to notice NNC’s pattern, it could lead to a self-fulfilling prophecy. As more traders buy into the stock in anticipation of a breakout, the increased buying pressure could help push the price higher, thus confirming the pattern and attracting even more buyers. Traders should keep an eye on NNC for a potential breakout opportunity.
LUMEN Bounces Off Support Trendline, Crucial Uptrend Level
Bouncing Off Support Trendline
LUMEN (LUMN) displayed an impressive bounce off the support trendline, which was discussed in the previous day’s video. The price found support right at the crucial area, leading to a beautiful bounce off that level. Traders who watched the previous video and picked up shares at the support trendline should be congratulated for their well-timed trade.
Foundation Rule in Charting
The first key update for LUMN is based on the foundation rule in charting, which states that when levels of resistance are broken and the price closes above them, you want to see them act as support. Ideally, moving forward, the price should stay above $2.78. While falling below this level isn’t the end of the world, staying above it would make the chart look the strongest.
Maintaining the Overall Trend
For the bigger picture, the purple line, which is the 50-period simple moving average, is crucial. As time goes by, this line will move itself higher and higher. As long as the price stays above this uptrending trendline, it means that the overall trend is still in favor of the bulls. However, for the strongest appearance, the price should remain above the $2.78 mark.
In terms of resistance, there is a minor level at $3.12, which is where the price action stopped today. The more significant resistance level is at the highs from the previous day, around $3.45. Overall, LUMN had a nice grind upwards today, flirting with potentially breaking through the $3.12 mark. If that happens, traders should turn their attention to the $3.45 level.
FARADAY FUTURE Needs to Maintain Critical $0.33 Mark
Crucial $0.33 Support Level
FARADAY FUTURE (FFIE) had a very nice start to the day, hitting new highs. However, after reaching those highs, the stock pulled back quite a bit. Despite this pullback, there is still a chance for the bulls to remain in control. The crucial level to watch is the $0.33 mark. If the price can stay above this level, it would indicate that progress is being made and that the bulls are still in control.
Determining Genuine Strength
The importance of the $0.33 level lies in the concept of progress. If the price were to break down below this level, it would put the stock right back in the range where it was before the recent move up. This would not be a sign of genuine strength. In simple terms, a big move up followed by a return to the previous range could be seen as a “pump and dump” based on the price action alone.
Potential Stair-Step Pattern
If FFIE can hold above the $0.33 level and start to curl back upwards, it could form a stair-step pattern. This would involve a low being formed at the $0.33 mark, followed by another low slightly higher. These lows could be seen as stair-steps, making progress in the upward direction. This is why the $0.33 level is so crucial – it will reveal whether the price is truly making progress or simply returning to its previous range.
NUZE Sideways Action Signals Potential Pullback Reversal
Sideways Price Action After Pullback
NUZE displayed an interesting pattern after a significant pullback. The stock had a nice start, but after hitting new highs, it pulled back considerably. The key question that arises in such situations is whether the pullback is a mere “gap and trap,” or if the stock is set to collapse back to its previous lows. In NUZE’s case, the price found support and leveled out, with buyers stepping in and preventing the stock from falling below $5.55.
Resistance Level and Potential Bullish Signal
On the other hand, sellers seem to be congregating around the $6.40 mark, which acts as a resistance level. The intriguing aspect of NUZE’s chart is the sideways movement following the pullback. While it’s not a guaranteed sign of a reversal, this sideways action makes it more plausible to consider the possibility of the stock curling back upwards.
Identifying Opportunities in Specific Price Ranges
For traders who find this price range below $10 appealing and look for situations where a stock experiences a significant pullback followed by sideways movement, NUZE could be worth keeping an eye on. The sideways action might be a leading indicator of an impending upward move. However, it’s crucial to remember that this is not a foolproof setup, and trading is rarely this straightforward.
