This is the weekly chart for Newell Brands (NWL) on the S&P500 and I have deliberately reduced the chart to a small scale to highlight three things. First, the potential this stock has to recover the highs of 2017. Second, the time accumulation phases can take to develop before a new campaign gets underway, and third, the shape such price action creates. It is also typical of the kind of chart pattern and structure I have sought out over the years where following a fall we see a flattening of price and the patient accumulation of stock. The development of the price action results in a pattern that is often described as a saucer shape which is then validated once we have a break above the areas of resistance that have been created as a result of the accumulation.
2020 was a good year for the stock as it doubled in value following the Covid sell-off in February which saw NWL fall to a low of $10.44. Since the return to and break from the vpoc at $16.00 we are now in an upwards trend aided by the buying which arrived at the end of December in the minor reaction lower. This has contributed to a solid move higher during January and more importantly has taken NWL through the resistance at $20 per share which is now acting as support.
So definitely another to have on the watchlist for 2021.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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