Note: This is a follow-up to the earlier buy signal for Medtecs - which saw Medtecs reaching a day-high for profit-takers who were interested (day-high of $1.17)
Medtecs recently broke out after the classical cup & handle formation. However, as this break-out was on relatively low volume, the price movement did not follow through and there was heavy selling on Friday, pushing the price down to a low of $1.10 before buyers supported it back at $1.13 to close at $1.13.
From a technical standpoint, Medtecs could have forming a bull-flag pattern but the next few days' volume will be crucial for us to gain a better understanding of the sentiment for Medtecs.
With the overall market being very bearish, it is no wonder that Medtecs was unable to rally strongly after the breakout and indeed, general market behaviour may inform us of Medtecs's future price movement. (note that Medtecs, some think, is often inversely co-related with blue chip performance since this is typically viewed as an alternative hedge).
As far as the technicals are concerned, it is likely for Medtecs to test the 50EMA to prove its uptrend and that will be a great area-of-value to purchase this security for trading purposes. With Medtecs supernormal earnings coming up, it is likely that the uptrend is just about to begin. (The counter-view being that all this has already been priced in since the gap has more or less been closed with a day high of $1.17).
Has Medtecs already reached its highest price in the months to come? All will depend on the company's reporting. Since the earnings report is likely to be out in March/April, and this is a pretty long runway, it seems that the most justified price-action will be for Medtecs to re-test $1.10 again (or even $1.02) and consolidate for a while before it attempts to break the $1.17 new resistance level formed.
Nonetheless, as of Friday, the uptrend is intact on the Ichimoku cloud system on the weekly, daily and 4 hourly time-frames. In fact, Medtecs has pushed above the cloud on the weekly time-frame, though there is a long upper wig due to the selldown from $1.17 all the way to close at $1.13.
Time will tell. As for now, I have exited all positions in this security.
Will observe the price movement of $Medtecs Int'l closely to make a safer decision.
Key levels to watch:
$1.20 - $1.35 - profit-taking region with high resistance
$1.17 - resistance
$1.10 - support (Tenken line on Ichimoku cloud + Key pivot + Fibonacci Retracement Level)
$1.08 - support (Kejun line on Ichimoku cloud system + Fibonacci Retracement Level)
$1.02 - support
$1 - psychological support
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