Below EMA 200 🚨🚨🚨

Shyon
2023-09-28

The market has been quite bearish for the past two weeks and it seems like not yet find its bottom. Today, let's look at some stocks below EMA 200, which is one of the most reliable trend line support. In general, stocks under EMA 200 are mid to long term bearish.

SHOP

The first stock is Shopify. 

SHOP daily chart

Usually, we allow 2-3 days of candle to be below the EMA 200. However, this time, the share price is well below the EMA 200 trend line continuously for 6 days, which is a $Shopify(SHOP)$ sign. 

Fundamental wise, considering that we’ve seen a surge in oil prices in recent months due to the Saudi oil production cuts, there’s a risk that inflation will once again rise which is justified by the strong rebound of $Occidental(OXY)$ recently. Moreover, we already saw how the CPI has increased in August after months of decline, and the potential rise of energy prices ahead of the winter season could certainly decrease the purchasing power of consumers. However, there's a chance to have a technical rebound as the current price is approaching its double bottom pattern.

NFLX

Another example is Netflix. Today is the first day it drops below the EMA 200 support, and attracts some buyers entry, therefore we see a long lower shadow in the candlestick.

NFLX daily chart

The fight between buyer and seller are usually very hot and aggressive at this level. The result will be quite extreme, either rebound strong or plummet far below. Since it's just the first day, I give it two days till end of the week and see if it can sustain and stand back to the EMA 200 line. Therefore, I am very short term $Netflix(NFLX)$ for the company.

COIN

Similar to the first stock shared above, Coin base also had a bearish movement. Firstly the stock price is well below EMA 200. Next, the chart is forming a lower high and lower low, sign of downtrend. Third, the previous low which acts as the neckline support seems to be broken as well. So it will be a definite $Coinbase Global, Inc.(COIN)$ for this crypto related company. No one will trade crypto oftenly in such boring market.

COIN daily chart

Do you use EMA 200 as a technical indicator during your analysis? How it helps in your trading? Kindly share with us ya. 

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# Technical analysis challenge

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Comment（6）

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  • WernerBilly
    ·2023-09-29
    TOP

    Aw $Shopify Inc(SHOP)$ is doing badly recently hope it can rebound

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    • Shyon: 
      Hope for the best, you may use EMA 200 as your guideline. As long as it stays below, it will be a bearish view.
      2023-09-29
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  • HarryCox
    ·2023-09-29
    TOP

    Can put netflix on watch list and wait for a rebounce

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    • Shyon: 
      Fully agree with your suggestion, it is not bad to keep this company in your watchlist!
      2023-09-29
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  • ChrisColeman
    ·2023-09-29
    TOP

    But SHOP seems to be in a totally downtrend 😭

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    • Shyon: 
      Yeah, this is true for mid to long term, still got some opportunity but purely short term only. Anything below EMA 200 is not suitable for long term.
      2023-09-29
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