Medium term
Trade view / 21 December 2015 at 9:15 GMT

Swedish Investor coiling for a bullish breakout

Instrument: INVEb:xome
Price target:
Market price:
Background

The Investor stock (INVEb:xome) has fallen with the overall market into a low on December 14. At the time of the low, the price managed to drop to an important support at SEK 300 and also retraced 61.8 % of the prior bullish swing into an early December peak from the late September lows. Oscillators were at the time of the lows pinned down into oversold readings and are currently making a comeback. This indicates that at least a medium-term low is in place.

The price is currently trading just below the falling trend line combining the peaks set in April and August. If Investor can manage to take out that falling trend line the next level of resistance is found at the SEK 325 level followed by SEK 340.

Management and risk description

The plan is to buy the INVEb:xome upon a break above the falling trend line at SEK 313, the targets are SEK 325 and SEK 340. The stop could initially be placed at SEK 307. Once we break higher we should see little hesitation in the ambition to take price higher if a medium-term low is truly in place why we could use a tight stop.

The risk to this setup is a fake breakout which is quickly reversed due to general market weakness.

Parameters

Entry: Buy above SEK 313

Stop: SEK 307

Target: SEK 325 and SEK 340

Time horizon: Up to three weeks

INVEb:xome daily chart
INVEb:xome daily chart
 
INVEb:xome daily development chart
INVEb:xome daily development chart


Source: all charts Saxo Bank 

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more

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