LMF Weekly- UpdateThis chart and analysis are not financial advice. Do your own research before trading or investing.
CSELK:LMF.N0000
H&S Pattern Breakdown
The H&S pattern consisted of a left shoulder, head, and right shoulder. The neckline appears around the support zone of 30-31 LKR. The recent bullish move with a significant breakout suggests that the H&S pattern failed to complete a bearish outcome, as prices moved upward instead of reversing lower.
Volume Spike
The breakout is accompanied by a notable volume spike, indicating strong buying interest. This volume surge validates the upward move, as high volume on a breakout can suggest sustained interest and potential follow-through.
Based on stage analysis, this stock appears to be maintaining it's stage 2 characteristics even though it broke the 30 WMA couple of weeks back.
Bullish Scenario
If the bullish momentum continues, the stock could aim for the resistance zones at 34-35 LKR and, subsequently, 38-39 LKR.
Continued support above the MA 30 line would strengthen the bull case, suggesting a move toward higher levels if buying pressure persists.
Bearish Scenario
If the price fails to hold above the 30-31 LKR support level, it may re-test the 24-26 LKR support zone.
A decline below the MA 30 and a break back below 30 LKR could indicate weakness and possibly a return to Stage 1 (Accumulation) or even a Stage 4 (Declining) if selling pressure intensifies.
LMF.N0000 trade ideas
LMF.N Weekly chartThis chart and analysis are not financial advice. Do your own research before trading or investing.
$CSELK: LMF.N0000
Moving Averages:
30-week Moving Average (MA 30): The yellow line represents the 30-week moving average, a key trend indicator.
The price is close to this moving average, which slows upward but seems flattening. This indicates a potential shift in trend as the price consolidates after a strong upward move.
Stage Analysis: Stage 2 (Advancing Phase):
The stock experienced a strong upward trend, reflected by the steep rise in the price and the increasing slope of the 30-week MA earlier in the chart.
The price has reached a peak near 34.50, which matches the top of the "Head" in the Head & Shoulders pattern. This is a sign that the stock has entered the latter part of Stage 2.
Potential Transition to Stage 3 (Distribution Phase):
The flattening 30-week MA and the formation of the H&S pattern suggest the possibility of a transition from Stage 2 (Advancing) to Stage 3 (Distribution).
Volume is also an important factor, and we can see a decline in volume during the formation of the right shoulder compared to the earlier price rise. This supports the distribution phase idea, where the stock is potentially being sold off after a long run-up.
If the price breaks below the support zone of 24.00 - 26.00 (S: 24.00 - 26.00, marked in green), the H&S pattern will likely be confirmed, and a bearish reversal could follow.
Relative Strength Index (RSI):
The RSI at 61 is still in bullish territory, indicating some upward momentum left. However, if the RSI starts to fall below 50, it would confirm a bearish shift in momentum, further supporting the H&S breakdown.
LMF BuyBetter to buy a chunk of LMF around current price 25.30 LKR (Now) as price is breaking out from the support zone 21.90 - 24.10 LKR and also breaking previous higher candle body price of 24.50. If you're buying new, better to buy 30% of the planned share amount, thinking of DCA if the price gets dropped. DCA buying plan is as follows.
25.30 LKR (30%)
20.00 LKR (33%)
17.50 LKR (37%)