Bearish potential detected for AGL

Entry conditions:
(i) breach of the lower confines of the Darvas box formation for
- i.e.: below low of $9.84 of 7th April, and
(ii) swing increased bearishness of indicators such as DMI/RSI along with a test of prior level of support of $10.02 from 11th March.

Stop loss for the trade (based upon the Darvas box formation) would be:
(i) above the high of 10th April (i.e.: above $10.89), or
(ii) above the prior support level from the open of 10th January (i.e.: above $11.15), depending on risk tolerance.

Trade active

UPDATE (week ending 27-Jun): Trade activated on 27th June with both entry conditions above satisfied. The share price closed below both 10 and 30 day MA's at the end of the trading week.

Note

UPDATE (week ending 04-Jul): Price action could be potentially turning around with a test of the prior support/resistance area of $10.02 from 11th March. Note that the share price is currently trading between the 10 and 30 day MA's - observe the DMI/ADX and RSI indicators for confirmation of the turnaround.

Note

UPDATE (week ending 11-Jul): Newer low of $9.57 formed during the week ($0.15 below the previous low), with suggestion to improve protective stop $0.15 lower to $10.67 ($0.23 below one tick above Darvas box).

Note

UPDATE (week ending 18-Jul): Newer low of $9.45 formed during the week ($0.12 below the previous low), with suggestion to improve protective stop $0.12 lower to $10.55 ($0.35 below one tick above Darvas box). Considering the share price closed between the 10 and 30 day MA's at the end of the trading week (rather than below both 10 and 30 day MA's), the charts are suggesting the possibility of a snap-back - for those traders who wish to be more conservative, consider lowering protective stops to an area slightly above the open of 9th April (i.e.: slightly above $10.16) in order to minimise potential losses (however, do note that this could also lead to potential of 'whipsawing' in the event that the share price falls again afterwards).

Note

UPDATE (week ending 25-Jul): Potential sentiment change is still occurring with respect to AGL, as discussed in the note last week, however the snap-back thus far hasn't been as severe as potentially expected, with the share price high reached being $9.99 on Wednesday. Consider maintaining the lowered protective stop noted last week (i.e.: slightly above $10.16) in case of continued snap-back, considering the whipsawing DMI indicator and rising RSI - let's give this trade room to breathe and exit should the snap-back force a trade exit.

Note

UPDATE (week ending 01-Aug): With a lower high and lower low formed during the week on the daily chart, the bulls had their chance to make a charge at the recent $9.99 peak, but there wasn't even a whimper at that stage, with the share price closing below both 10 and 30 day MA's at the end of the trading week. Consider lowering protective stops to slightly above the $9.99 considering the 'first strike' that occurred with the recent snap back, in order to protect potential losses in the event of a sudden reversal in trend. Certainly time to be additionally aggressive considering upcoming earnings on 13th August.

Trade closed: stop reached

UPDATE (week ending 08-Aug): The lowered stop loss discussed in last week's note was triggered on various days over the past week as the bulls finally managed to weasel their way in, even though it wasn't all that convincing. Considering upcoming earning midway through next week, where any outcome is possible, better safer than sorry anyway rather than having a catastrophic result on your hands.

Ivory_Wolf

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Ivory_Wolf

Detailed commentary/updates about trades (stocks, crypto & bonds) available:

ivorywolf.start.page/ (Facebook / Telegram / YouTube / personal web-page)

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