Market News & Analysis
SJM Holdings: Focus On Breakout Signal
Medion Jim May 6, 2020 5:40 AM
From a technical point of view, the stock retreated after touching the declining trend line on a daily chart. However, the stock does not drop dramatically and forms a consolidation zone. In addition, a rising trend line has created from March bottom. The 20-day moving average is also turning up and acting as support. The RSI is ranging within the overlap zone between 38 and 60. Those technical indicators suggest the lack of momentum for the prices.
Therefore, readers should focus on the breakout signal as the converging zone drawn by the rising trend line and declining trend line is becoming narrow. We would expect an acceleration signal when one of the trend lines is broken.
A break above the declining trend line could consider a further rise to the resistance levels at $8.12 (the previous high and around the 50% retracement level) and $8.75 (61.8% retracement). On the other hand, a break below the rising trend line could bring a return to the support levels at $7.08 (old top on March 26) and $6.28 (previous bottom on April 2) respectively.
Sources: GAIN Capital, TradingView
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.