*TA as of 3/4/24
Hi everyone! Today I’ll be covering a stock close to home:
Sea Limited (NYSE: SE)
SE was a pandemic darling with bags of promise as the stock received upgrade after upgrade. However, as the world returned to normalcy, it fell out of favour with investors. The breaking point was the time it broke its long-term trendline in May’22, as it continued to trend lower, to as low as 35 a share.
From the weekly chart, it is apparent that it was trading in a falling wedge reversal pattern with lower highs and lower lows, albeit with a tightening range. It hit an inflexion point when it formed a bullish divergence pattern on the weekly, which has cumulated in a breakout from the rising wedge.
On the daily chart, we can see that bearish divergence marked a short-term top, as the stock pulled back into its trendline. It is now forming a hidden bullish divergence setup while retesting the 53.55 support. This was previously a level with significant basing, and thus it was not surprising to see it at this current level.
So, where could SE head from here?
Evidently, it has unfinished business at that 67.08 level, where I expect it to reject, form a bearish divergence and then base in the high 50s before breaking above 67.08 in the longer term.
For SE, I will update my longer-term price targets in a future newsletter. Moving forward, we will adopt a shorter-term outlook with more frequent updates.
Sentiment: BUY (New)
Summary (with Price Targets - NFA):
Forming higher highs and lows and found support at 53.55. Next leg should take it to 67.08, where it is expected to reject and base in the high 50s.
Investors (long-term horizon) can consider accumulating at current levels for the next leg higher, but they can expect to see some volatility and choppiness once we hit the 67.08 level. Once this level is properly turned into support, then the next leg of alpha will be generated.
All right, that’s all for this newsletter. Till next time!
$Sea Ltd(SE)$ $Wayfair(W)$ $Alibaba(BABA)$ $PDD Holdings Inc(PDD)$ $JD.com(JD)$
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