U - Bullish Divergence
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U had been building a base since Last Sept (10 months in the making now) and had remained above its 200-day moving average since 6th June this year. We also saw a Golden Cross on 28th June. Hence the longer-term picture of U remains potentially bullish except that it has been very volatile since its first attempt to break above its basing neckline @ 42-43 on 16 June.
U has now broken up its neckline for the 3rd time (since 16th June) and once again, experienced another steep pullback (for the past 5 days). The pullback now appears to be stalling at the neckline and a bullish divergence is between its price and RSI is also emerging.
Could this bullish divergence be a clue to its earnings announcement (expected on 2nd Aug)?
However, bear in mind there is always an inherent risk to trade during earnings.
Should the stock be able to stay above its neckline in the coming days, then the odds have increased that it's uptrend could gain more stability (just hopefully though!). Meanwhile, buying the dips is still a safer way to approach this stock.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is (probably the most) important! Take care and Good Luck!
U has now broken up its neckline for the 3rd time (since 16th June) and once again, experienced another steep pullback (for the past 5 days). The pullback now appears to be stalling at the neckline and a bullish divergence is between its price and RSI is also emerging.
Could this bullish divergence be a clue to its earnings announcement (expected on 2nd Aug)?
However, bear in mind there is always an inherent risk to trade during earnings.
Should the stock be able to stay above its neckline in the coming days, then the odds have increased that it's uptrend could gain more stability (just hopefully though!). Meanwhile, buying the dips is still a safer way to approach this stock.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is (probably the most) important! Take care and Good Luck!
Note
Unity's attempt to breakup it's neckline @ 42-43 zone failed for the 3rd time in within the last 2 months (alas!).
Despite it's upbeat earnings on 2nd Aug, the stock was not able to stay above its neckline (1st warnings). As the days progressed it even started to go below its 50 day MA (2nd warning).
This is the first time it went below its 50 day moving average since breaking above its 200 day moving average on 5th June and the stock is now back within its base formation. Although it is still above its 200 day MA, it may continue to be directionless or range bound for sometime.
I would stay out of it for now and will relook only if it can break above its formdiable neckline @ 42. Should I decide to trade the breakup, I would put a tight stop loss about $1 below 42 in case it failed yet again.
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