Bottoming For A Decade

 

Celestica Inc. is a multinational electronics manufacturing services company headquartered in Toronto, Canada

Celestica Inc (CLS) has been constructing a bottoming pattern for the last decade. Last week CLS opened with a gap and surged almost 10%. The neckline of this inverted Head & Shoulders pattern at 13.10 has not yet been broken. Keep a close eye on Celestics, this may be the start of multi year rally.

Celestica Inc beats Street 2Q forecasts

 

CLS

Multi Year Support Levels

 

This post will be different than the usual breakout posts.

Support and resistance levels represent human emotions through pictures. Support occurs when buying demand is greater than selling pressure, putting a temporary floor below the stock.

Support represents an area where price is likely (but not guaranteed) to stall or reverse. Its critical that you understand the latter sentence. Read it again

Furthermore, the support level becomes more significant every time the stock touches it and reverses direction. Why? Its just psychologically that traders remember that buying at that price was always profitable.

Lets look at a couple of examples..

Occidental Petroleum Corporation (OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. OXY is currently on multi year support levels (70-73) which were tested in 2010, 2011, 2012, 2014 and this year. Buying at these levels provides a low risk entry point.

The next stock is Gold Fields Limited (GFI) which operates as a gold mining company. Again, GFI is currently on multi year support levels between (2.50-3.0) which were tested in 1999, 2000 and the last couple of years.

Make sure you have your stop loss entries in place as Support represents an area where price is likely (but not guaranteed) to stall or reverse.

 

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