The index had a bullish follow through this week confirming the bullish actions the other week. Aside from the significant follow through, the index was also able to break above the previous high for last year and create a new all time high for the index.
However, the bears are still able to throw their weight on the index considering the large downward spread created on Wed and Thurs last week. Also the current bullishness is still not that widespread to most of the stocks.
This might be the start of the bullish phase of the index coming from a recent sideways movement, but with the still considerable influence of the bears, we’re probably in for an upward crawl or a ranging upward movement for the market.
One could get in the market now and pick stocks to position themselves during the dips. Do observe the support line, you can hold on to your positions as long as the index is creating higher lows
PCOR has been exhibiting bullishness for the past two weeks. On both instances a white candle with large spread was created and was accompanied by large volume as well.
There is a horizontal channel formation with resistance near 17.20. Also with the past 2 weeks, a flag/pennant formation can be seen. The second flag formation is still ongoing, but if this pushes through to breakout, it can reach as high as 18.00.
What would be interesting to observe is that if the second flag formation is realized, the formation would create a large spread for the white candle and if accompanied with large volume, the pole part of the flag formation would also break the current resistance line for the horizontal channel giving the possibility for the stock to reach as high as 21.00, which is the target price for the horizontal channel. It’s like 2 birds hit with one pole. Otherwise, if the second flag formation does not materialize, then it’s just an ordinary ranging action between 13.40 to 17.20.
If you can buy at last week’s closing price of 16.24, there is still money to be made (around 4%) before the price reaches the resistance line, but again that price is very near the resistance line and the stock is very much overbought, so there is a higher possibility for sell down to happen anytime.
For the risk averse, I would suggest buying only when the stock breaks out of the channel. If the resistance proves to be strong, this means we might see continued ranging movement of the stock within the channel.
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