Figure 1: MEG Weekly Price Chart
Based on the chart of MEG in the weekly view, it can be clearly seen that MEG's current overall trend is moving sideways to up. Based from the S/R and the Fibonacci lines, the support line is located around 1.30 to 1.34. The Bollinger bands indicated that MEG's price is already near its oversold area which is at 1.30.
Figure 2: MEG Daily Price Chart
A deeper look unto the daily chart of MEG we can see that accumulation is currently on going. The last two candlestick bottom tails/shadows also indicates that many are buying during the weakness. This is very significant. We want to see that the big players are coming in to support the stock. We want them to protect us from any downside risk.
Figure 3: Other Technical Indicators
Based on the indicators above, we can tell that MEG is a consolidation stage right now. There is no presence of a trend and momentum is also very weak. The good thing is, it is already at the oversold area as indicated by the stochastic indicator. This farther will confirm the bollinger bands of figure 1 that MEG is near its oversold area.
Figure 4: Support/Resistance lines
A much detailed view of MEG's support and resistance lines can tell us that it is currently standing on both the Fibonacci and S/R support line which is at 1.36. Its nearest Resistance lines are located at around 1.42 to 1.44.
Weekly pivot point: 1.42
Support lines: 1.34, 1.30, 1.24
Resistance lines: 1.44, 1.50. 1.54
Recommendation:
MEG is a buy on the range of 1.34 to 1.30, but be very careful when the support line at 1.30 is broken for this may go down to as low as 1.24 which is the next support line.
the head and shoulder breakdown could take this lower below 1.24
ReplyDeleteYes, there is a possibility if those support lines will not be able to hold the current price of MEG. Based from the computation from the head and shoulder 1.22 is the TP for shorters which also correspond to our support line at 1.24.
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