Potential bottoming out stock with strong momentum
WBA has been on a decline for the whole of 2024 and until start of Q4 (Sept 24), the stock actually halted and went into a consolidation stage. This year saw some recovery after the stock posted good earnings and jumped more than 27% last Friday. We believe that the stock is heading for a recovery in the near term based on the following positive trend and momentum metrics: Price action
The stock has broken out of the 1-year downtrend line which started in Dec 2023 and the recent break was a gap accompanied by strong volume. Furthermore, the stock has also broken out of the rectangle range and the smaller flag. Next, prices have already trended above all Ichimoku indicators.
Momentum
Long-term MACD's histogram has turned positive and has shown a steady upside since the MACD/signal line performed a crossover at the bottom. This shows a strong sign of a potential return of the long-term momentum ahead.
The stochastic Oscillator (62, 12, 12) rose and confirmed the oversold crossover.
The rate of change managed to rise sharply above the zero line.
Volume and Trend strength are in a healthy stage. Both are displayed by volume and Directional movement index.
Potential Risk:
However, the stock may face potential risk which includes the strong rejection at the key gap resistance at 12.26 -14.59. However, if prices breaks OR range within these gap zones, then it is safe to continue holding or accumulate and reach our target at 19.48 as the 1st target and 28.00 as the 2nd and long-term target.
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