Hi everyone! Here’s my first newsletter in a week, and it’s on a satellite designer:
AST SpaceMobile, Inc. (NASDAQ: ASTS)
ASTS peaked in early-2021 at 25.37, before it chopped in a 3-year long descending channel that cumulated in a breakout in May this year. Since then, ASTS has retested its 2021 ATHs from above, while RSI comes down from extreme overbought levels while the Stochastic oscillator comes back into extreme oversold levels.
On the daily chart, ASTS appears to be consolidating in both an ascending triangle and a symmetrical triangle pattern. This obviously means one thing - that 25.37 will be key as to how ASTS moves in the short term.
If ASTS loses 25.37, a retest of prior resistance at 21.72 comes into play. Conversely, if ASTS holds this level, then we’re likely to see a breakout and move towards 30.51 and higher. Fundamentally, if we see a breakout, I am expecting ASTS to head towards prior ATHs at 39.08.
The relatively oversold nature of the oscillators suggests that the stock is nearer to an interim bottom than it is to making a top. Thus, I am initiating coverage on ASTS with a BUY based on the technical setup available to me.
However, should ASTS lose 21.72, then it is clear the bullish thesis no longer exists, and we should be looking towards a retest of its 3-year consolidation channel from above.
Sentiment: BUY
Invalidation: Close below 21.72
Summary (with Price Targets - NFA):
Consolidating in a short-term symmetrical triangle and a descending channel pattern that should cumulate in a substantial move soon
Holding 25.37 (2021 ATHs) is the key to the setup
Above 25.37, it opens the door for 30.51 and eventually a move back towards ATHs at 39.08
Below 25.37, it opens the door to 21.72 and, in an extreme scenario, a retest of the descending channel from above
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