Let's break down the weekly chart of HCWTrend Analysis
Long-Term Trend: The chart shows a clear downtrend from mid-2022 to early 2024, as indicated by the consistent lower highs and lower lows. The 200 EMA is sloping downward, which generally signals a bearish long-term trend.
Recent Price Action: The price appears to have found some support around the 1.100 AUD to 1.150 AUD level, as it has bounced off this area multiple times over the last few months. Currently, the stock is trading around 1.220 AUD, showing some short-term recovery from its lows.
Support and Resistance Levels
Support: The most significant support is around the 1.100 AUD level, which has held for a few months now. This level could act as a strong base for any potential upward movement.
Resistance: The stock is facing immediate resistance around the 1.220 AUD to 1.250 AUD level, which aligns with the 50 EMA. The next major resistance level would be around 1.350 AUD, close to the 100 EMA.
Moving Averages
50 and 100 EMAs: The price is currently just below the 50 EMA and well below the 100 EMA. The EMAs are both trending downwards, indicating that the broader bearish trend is still intact. However, the recent price action breaking above the 20 EMA could be an early sign of a trend reversal if it sustains.
200 EMA: The 200 EMA is also trending downward, further supporting the long-term bearish sentiment. Any potential bullish breakout would need to clear the 100 and 200 EMAs to confirm a stronger reversal.
Volume Analysis
Volume: The volume has been relatively low compared to the earlier periods of decline, which could suggest a lack of strong selling pressure. However, the absence of high buying volume may indicate that any bullish movement might be tentative or short-lived without further momentum.
Profit Target and Stop Loss
Profit Target: If the stock breaks above the current resistance around 1.220 AUD to 1.250 AUD, the next profit target could be around 1.350 AUD, where the 100 EMA is positioned. A more aggressive target could be near the 1.450 AUD to 1.500 AUD level if bullish momentum picks up.
Stop Loss: A stop loss could be placed slightly below the 1.100 AUD support level, around 1.080 AUD, to protect against any further downside. If the stock breaks below this level, it could signal a continuation of the bearish trend.
Prediction
Given the current chart setup, HCW appears to be at a critical juncture. If it can break and hold above the 1.250 AUD resistance level, it might signal the beginning of a recovery, at least towards the 100 EMA around 1.350 AUD. However, if it fails to break above this level or if it drops below the 1.100 AUD support, the stock could revisit its recent lows or even test new lows.
Traders should be cautious given the overall bearish trend but may find short-term trading opportunities if the stock can maintain its recent support levels and break through resistance.
