Lemonade, Inc.Long
LMND - Update
Hi guys, ive been tracking LMND since february as i noticed we were interacting with major resistance trend line that formed since its top in 2021. Just to mention its extremely hard to predict what goes on in the markets, and i was somewhat wrong in my short term prediction in my previous charts. As we made a lower low ($10.37). BUT im still long this company and my thesis in general for the longer term is still INTACT.
Remember this is strictly technical analysis ONLY. I do not go into fundamentals at all and quite frankly it works for me. I believe the charts to be the only tools needed as they help increase my probabilities of success.
Anyway lets jump in.
Firstly we start with price action. This analysis is done on the weekly timeframe. So this analysis is not for short term trading but to assess a longer term trend change.
We are currently in the process of breaking the orange downward sloping trend line i drew that began in july 2022 (notice the green arrow as well).
The candle is also a massive sized candle which is extremely bullish. BUT please note this candle has NOT yet closed. We must wait for tomorrows (friday) candle close. If we do close at these levels and we are above orange trend line. In my opinion this is extremely bullish. As this will wipe out the last 4 bearish candles. The candle also shows there was massive buying from $10.37.
We are also approaching the yellow line which is the 21 week moving average. This is crucial as for all assets, if we move above, confirm and it acts as support it signifies at the very least a couple of weeks to many weeks of movement to the UPSIDE.
We are also approaching the trend resistance downsloping trend line. THIS IS MAJOR RESISTANCE since January 2021. If we manage to get above this, in my opinion will be a big sign for LMND to have seen its bottom.
But we have to be patient. Take it week by week. We can also see prices move sideways, as bottoms take some time to formulate.
Now, as mentioned in my previous charts (posted below), i was wrong in the short-term price movements. I did not expect the drop of price to $10.37. I was expecting a move directly to the red trend line. But notice how we reactd to the white trendline, with this massive engulfing bullish candle.
ALso my thesis on the BULLISH DIVERGENCE has strengthened even more, after the drp to $10.37. And notice since we are in the weekly timeframe. The move that may ensue, if i am correct about the divergence can be a massive one.
Bullish divergence is highlighted by the white trend lines drawn in the price action and the RSI indicator.
ALso just note, at $10.37 we were down 94% from the top at $187.00.
**********Also note to take a trade, we need to wait for next week candles close and look for confirmation candle patterns printing. It is still possible for tomorrow to be a down day and it closing below the orange trend line************
NOTE also in the RSI. -> we are breaking out of the trend resistance trend line. Forming a higher high. We are also above the yellow moving average. This is bullish if we close tomorrow above these 2.
CONCLUSION:
Though i was wrong in the short term about price action, all in all it may be in a consolidation phase. A BULLISH divergence is also in play, currently with the RSI spike to the upside, might be playing out as we speak. We do have to observe the close of this current candle, as it being a weekly candle, we must wait and see what tomorrow brings. If we end of closing above $13.88 tomorrow, we must see what next week brings. Its also important to note the size of this candle, if we are bigger than the previous red candle come tomorrow, this is a good sign. It shows buying. RSI is also breaking trends and creating a higher high after 1 month. Overall things are looking good but we must exhibit patience. Next couple weeks is crucial for LMND.
Hope this helps. If you have any questions on TA, please comment. Let me know alsow hat you think. Please boost and follow if you like this content. I will be putting up more updates on LMND as well and will be closely observing since i am holding a position.
DISCLAIMER: This is NOT fiancial advise, i am NOT a financial advisor. Everything expressed in this post and all my posts are just my opinion and for my own educational purposes. When making trades, please do create & follow your own strategies. Make sure you focus on risk management and protect yourselves with stop losses.
Remember this is strictly technical analysis ONLY. I do not go into fundamentals at all and quite frankly it works for me. I believe the charts to be the only tools needed as they help increase my probabilities of success.
Anyway lets jump in.
Firstly we start with price action. This analysis is done on the weekly timeframe. So this analysis is not for short term trading but to assess a longer term trend change.
We are currently in the process of breaking the orange downward sloping trend line i drew that began in july 2022 (notice the green arrow as well).
The candle is also a massive sized candle which is extremely bullish. BUT please note this candle has NOT yet closed. We must wait for tomorrows (friday) candle close. If we do close at these levels and we are above orange trend line. In my opinion this is extremely bullish. As this will wipe out the last 4 bearish candles. The candle also shows there was massive buying from $10.37.
We are also approaching the yellow line which is the 21 week moving average. This is crucial as for all assets, if we move above, confirm and it acts as support it signifies at the very least a couple of weeks to many weeks of movement to the UPSIDE.
We are also approaching the trend resistance downsloping trend line. THIS IS MAJOR RESISTANCE since January 2021. If we manage to get above this, in my opinion will be a big sign for LMND to have seen its bottom.
But we have to be patient. Take it week by week. We can also see prices move sideways, as bottoms take some time to formulate.
Now, as mentioned in my previous charts (posted below), i was wrong in the short-term price movements. I did not expect the drop of price to $10.37. I was expecting a move directly to the red trend line. But notice how we reactd to the white trendline, with this massive engulfing bullish candle.
ALso my thesis on the BULLISH DIVERGENCE has strengthened even more, after the drp to $10.37. And notice since we are in the weekly timeframe. The move that may ensue, if i am correct about the divergence can be a massive one.
Bullish divergence is highlighted by the white trend lines drawn in the price action and the RSI indicator.
ALso just note, at $10.37 we were down 94% from the top at $187.00.
**********Also note to take a trade, we need to wait for next week candles close and look for confirmation candle patterns printing. It is still possible for tomorrow to be a down day and it closing below the orange trend line************
NOTE also in the RSI. -> we are breaking out of the trend resistance trend line. Forming a higher high. We are also above the yellow moving average. This is bullish if we close tomorrow above these 2.
CONCLUSION:
Though i was wrong in the short term about price action, all in all it may be in a consolidation phase. A BULLISH divergence is also in play, currently with the RSI spike to the upside, might be playing out as we speak. We do have to observe the close of this current candle, as it being a weekly candle, we must wait and see what tomorrow brings. If we end of closing above $13.88 tomorrow, we must see what next week brings. Its also important to note the size of this candle, if we are bigger than the previous red candle come tomorrow, this is a good sign. It shows buying. RSI is also breaking trends and creating a higher high after 1 month. Overall things are looking good but we must exhibit patience. Next couple weeks is crucial for LMND.
Hope this helps. If you have any questions on TA, please comment. Let me know alsow hat you think. Please boost and follow if you like this content. I will be putting up more updates on LMND as well and will be closely observing since i am holding a position.
DISCLAIMER: This is NOT fiancial advise, i am NOT a financial advisor. Everything expressed in this post and all my posts are just my opinion and for my own educational purposes. When making trades, please do create & follow your own strategies. Make sure you focus on risk management and protect yourselves with stop losses.
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