Monday, January 16, 2017

FIS in Wave 5 on Monthly But Still Has Significant Headroom

A horizontal consolidation pattern characterized the stock performance of Fidelity National Information Services, Inc. (NYSE: FIS) for the entire fourth quarter of 2016.  The pattern is showing signs of an impending breakout, however.  To understand the overall trend and determine where FIS could head, we'll start with a look at the monthly chart. 

FIS Monthly Chart
On the macro level, the current uptrend started with a strong monthly reversal candle in November 2008 at the peak of the Financial Crisis.  After a lackadaisical first wave that barely exceeded the pre-crisis high, Wave-3 took off and, depending on your interpretation of the wave count, ended in either last 2015 or mid-2016.  The date of it's ending doesn't much matter for our trading horizon, however what's important here is that the overall long-term trend is up, and there is still a full Wave-V to go - a Wave-V that is virtually unrestricted due to the length of Wave-III.  The channel boundaries in the up-trend suggest the current consolidation could run a bit longer, but there are no downward pressures of significance on the chart other than a bearish divergence in the RSI(9) oscillator that is typical of the top of one of the impulse waves.

FIS Weekly Chart
The weekly chart improves the picture and starts to approach our trading horizon.  Here we can see the development of the last major impulse wave on the monthly chart, and on the weekly it's clarified into a 5 sub-wave pattern.  This pattern is more relevant to us since the potential for the final impulse wave to end in the short-term greatly increases. That doesn't mean that wave-5 can't extend into a second impulse, however we don't yet have evidence that it will happen.

Again notice the consistent bull channel that runs the entire length of this impulse wave.  Right now, we're trading near the center of that channel, although we are resting on a shorter term horizontal resistance line that's held for the last six-months.  A breakout from that resistance line will be an excellent indication that Wave-v is in progress, and would be a very good long entry point if confirmed on the daily chart.

FIS Daily Chart
So now we know that the long-term trend is up (based on the monthly chart), and the intermediate term trend is up but potentially running out of steam (based on the weekly chart.)  Let's now look at the daily chart since it's on this time frame that we look for our setups.

This horizontal consolidation that's been running since July 2016 forms a narrowing wedge pattern, but the channel itself is ill-suited for swing trade setups.  Price has not oscillated between the extremes with any consistency.  The much shorter term channel - in magenta - does show more promise since there were three touches to both support and resistance since late November 2016.  Last Thursday's candle was a retest of support, and that was rejected on high volume.  Even though the candle is red, that hammer was a very bullish indicator.

This, in fact, is the setup we are looking to take.  Friday's candle offered confirmation of the price rejection, at least in the short-term.  Going long just above the high of Friday's candle with a stop below the rising support line offers a good setup.  The rising resistance line offers a good exit opportunity, although we may also want to allow at least half of the position to continue to run since Wave-v should initiate soon.  It would be nice to catch that wave if we see the setup in time.

Be aware that FIS reports earnings before the open on 7 February. They are expected to trade ex-dividend in late March, so that should not have any bearing on our trade horizon.  Do be aware of the earnings date, though, if we attempt to ride the crest of Wave-v.

Happy Trading.

Sunday, January 15, 2017

CXO in Bull Channel But Weakness Abounds

With oil rebounding off the major lows that characterized 2015, the exploration and drilling industry began to recover in early 2016 and enjoyed a slow but steady uptrend  for much of the year.  One such exploration company that continues to trade in a bullish channel is Concho Resources, Inc. (NYSE: CXO).  Concho's area of focus is the Permian Basin in West Texas and Southeast New Mexico, a region that should benefit from any relaxation of environmental controls that currently add pressures to the bottom line and inhibit growth in the industry as a whole.

Overall, the industry experienced a rapid price appreciation in the first half of last year, however, that positive rate of change diminished as oil prices stabilized later in the year.  The result, especially in the case of Concho Resources, is an oscillating price pattern in a bullish channel at a gradual but healthy slope.

CXO Daily Chart
There are warning signs, however, that the channel's strength may be waning.  For all of 2017, price was riding the support line of the channel.  The various bullish candles in the last couple of weeks are starting to look more and more like testing patterns leading into a distribution phase and subsequent downtrend.

On Balance Volume turned down off the highs and continues to slope down.  This is another indication that demand has waned and supply is starting to enter the equation.  Finally, the RSI(9) Oscillator transitioned from a bullish divergence (shown in black trend lines) to a bearish divergence (shown in red trend lines.)  The daily picture cautions that the uptrend may be weakening to the point of breaking to the downside.  If so, expect those two green support lines in the channel to quickly transition into resistance lines.

The weekly chart does nothing to change our view that the trend is on the cusp of change.

CXO Weekly Chart
As we might expect based on the overall pressures in the energy sector, CXO spent the last several years in a long-term correction.  The monthly chart suggests the correction may have ended in January, 2016, but we don't yet have sufficient evidence to reach that conclusion.

Starting with that late January 2016 low, a 5-wave impulse pattern ran its natural course, ending in early December, 2016.  Notice that Wave 5 was an extended wave that included two deep corrections.  The pattern now is in Wave-A of the corrective pattern coming off that 5-wave impulse.  Now, if this is a new impulse on the monthly chart, then that Wave-5 top is also Wave-I on the higher order, however we cannot yet state that as fact.

Just like the daily chart, the weekly uptrend formed a bullish channel that continues to hold price along the support line.  Weakness in the recent pattern coupled with the completion of Wave-A strongly cautions us that the channel could be broken to the downside.

Long-term traders will notice the double top pattern that set up with the Wave-5 completion.  Now, this pattern has yet to confirm since that requires a break of the neckline.  I draw that neckline as being horizontal from the first low, however be aware that there are other possible interpretations that would lower that neckline by at least 5-points.

The next warning sign comes from the RSI(9) oscillator.  A bearish divergence started to manifest with the completion of Wave-3.i.  Since then, the RSI showed continued weakness while the price action experienced a series of higher highs and higher lows.  This weakness would be consistent with the corrective wave pattern we anticipate following the Wave-5 top.

Finally, OBV is flattening and may actually be starting to hook down.  The bearishness of this volume indicator is more prominent on the daily chart, but even here on the weekly we're seeing evidence that distribution may be entering the scene.

This brings us to our view on how we may be playing this setup.  Given all the weakness, I'm hard-pressed to consider a long position, despite the positioning of price on the support line in a bullish channel.  That would change, of course, if we see a strong bullish candle with confirming volume, however that's not the move we expect from this position.  Rather, we're watching for a break of the support line to the downside on confirming volume.  If we get that break, we'll look to enter short on a retest and rejection of that former support line as it transitions into resistance.

We will also be watching for the development of the A-B-C corrective wave.  Wave-A looks to be in progress, so the retrace for Wave-B should give us a clue as to the type corrective pattern this will be and will tell us how to play Wave-C.  It's that Wave-C move that we'd really like to catch if we can read the entry in time.  Watch for that signal since an entry in the area around $145 could move close to 20-points on the downside if the pattern follows a traditional zig-zag correction.

Happy Trading.

Saturday, January 14, 2017

SWKS Ready for Breakout on Daily and Weekly Charts

Earlier this week, a Presidential Advisory Panel issued the "Report to the President Ensuring Long-Term U.S. Leadership in Semiconductors."  The report focuses on the status of the US Semiconductor industry and serious threats to that industry being posed by policies emanating from China.  In the executive summary section, the report warns of fundamental weakness in the industry due to technological limitations and rapid expansion in the semiconductor market, then went on to state, "Now a concerted push by China to reshape the market in its favor, using industrial policies backed by over one hundred billion dollars in government-directed funds, threatens the competitiveness of U.S. industry and the national and global benefits it brings."

The report reaches the conclusion that, "...only by continuing to innovate at the cutting edge will the United States be able to mitigate the threat posed by Chinese industrial policy and strengthen the U.S. economy. Thus, the report recommends and elaborates on a three pillar strategy to (i) push back against innovation-inhibiting Chinese industrial policy, (ii) improve the business environment for U.S.-based semiconductor producers, and (iii) help catalyze transformative semiconductor innovation over the next decade. Delivering on this strategy will require cooperation among government, industry, and academia to be maximally effective."

It is against this backdrop of increasing pressure on the semiconductor industry as a whole and the specific threats to the US industry from China that we turn our attention to one of the major US semiconductor companies with a strong international presence, Skyworks Solutions, Inc. (NASDAQ: SWKS).  The stock is poised for a breakout (in either direction) on both the daily and the weekly charts.

SWKS Weekly Chart
For this analysis, we'll start with the weekly chart since that puts everything in perspective.  Looking at price action alone, the stock started a parabolic upward impulse that included 5 well-defined sub-waves, ending Wave-1 on the weekly the week of 1 June 2015.  From there, a Wave-2 correction retraced 61.8% of the impulse pattern, and possibly completed in July 2016.  I say "possibly" because the current pattern on the weekly chart is not conclusive with respects to the start of a Wave-3.  The next move will likely provide that insight.

Volume on the weekly has consistently declined, and combined with the price action, the likelihood continues to increase that we're looking at a coiled spring in the final stages before a major breakout.  (Remember, a breakout can be either up or down.)  The On Balance Volume line is now flat, and when we look at the RSI(9) Oscillator on the weekly chart is converging into an apex that confirms the coiled spring interpretation.  All signs on the weekly point to a breakout in the short term.

SWKS Daily Chart
There's virtually no disagreement to the coiled spring assessment coming from the daily chart.  There are converging trend lines all coming into focus within the next few days, so some type of breakout appears imminent.  Notice the consistent slope from the three upward sloping trend lines.  The dashed red upward sloping line started out as a support line with five touches in that capacity before it was broken and became a resistance line.  (It's current role as resistance is the reason I show it in red.)  Two additional lines parallel to that one form the current support channel, and we can see the strength of that channel in the short term.  

Now look at the resistance lines.  That lower resistance line actually extends out to the top of the peak in December 2015.  There are four clean touches of that line, and two additional touches that extend the full channel up by about a point.  Again, the resistance trend lines appear as strong as the support trend lines.  From a Wyckoffian perspective, this is certainly building sufficient cause to support a strong breakout.

At first glance, we see a warning sign from that strong red volume bar on 12 January.  When we examine the candle, however, we see that the volume was all demand, and that demand came into play on a bounce off the lower support line.  In fact, it rebounded above the upper support line and closed near the high of the day.  That's a major rejection of price and the strength was confirmed in yesterday's price action.

The RSI(9) Oscillator is showing major strength along the lows, and the highs are confirming price action.  There's no weakness in evidence in the RSI(9).  On Balance Volume is also following a gradual upwardly sloping trend line.  This is signalling that we have more strength to the upside than we do to the downside.

The conclusion we reach is that SWKS appears ready to break out.  While the charts are strongly suggesting an upside breakout, naturally we need to be prepared for either.  A long entry on any of the support touches starting 5 January would have been strong plays.  Unfortunately, they don't allow us to trade retroactively!  Instead, we need to seize the opportunity to play what emerges from here.

If entering long, I'd prefer to enter along one of the two support lines that are forming our channel.  If we get a pullback to that either line and then rebound, I'll take that entry.  The action on the 12th and 13th suggest we may get one more test of that support line before the breakout, if the breakout is to be to the upside.  I'll watch for that test and if it occurs on weak volume, I'll enter long.

On the flip side, I'd prefer to enter a short position on a rejection off a test of the resistance line.  Again, if we test that line on weak volume, I'll enter short there.  What we are hoping to setup is a situation where we can enter on the inner support or resistance line with a stop just beyond the outer stop or resistance line.  Either of those conditions (assuming we read the volume and price action at time of entry correctly) will setup the best reward to risk ratio we can obtain from this setup.

A less desirable entry will be on a breakout above resistance or below support.  If volume confirms, we'll take it since the two lines have converged to the point where the stop will still be relatively close, however we'll be watching closely for a better entry setup if one manifests.

Happy Trading.

Friday, January 13, 2017

Honeywell Showing Strength In Tight Bullish Channel

The second and third quarters of 2016 were not kind to Honeywell (NYSE: HON).  The stock spent much of those two quarters in a horizontal pattern before an 8-point gap wiped out nearly 50% of the entire year's gains.  That drop was very short-lived, however, and anyone that went long on the bounce off long-term support two-days later were well rewarded.  A tight bullish channel paved the way for the remainder of 2016 and into 2017, while Honeywell reclaimed all of the territory lost in early October.

HON Daily Chart
To be sure, the election of a potentially hawkish and definitely business-friendly US president helped this stock.  The selection of a "tough talk" Secretary of Defense helped as well, giving a solid boost to the prospects for Honeywell's defense contracts.  With this backdrop, CFO Tom Szlosek helped the company's cause in mid-December, promising very strong cost-cutting measures and projected a very rosy outlook for growth in segments not related to Defense. 

There's very little indication that the climb is being exhausted.  Volume continues to be consistent, and On Balance Volume shows an extremely strong upward slope that is indicative of accumulation.  The RSI(9) Oscillator on the daily is confirming the overall price action, and the Oscillator is nowhere near its extremes to the high side. 

From an Elliott Wave perspective, the stock is in a Wave-(iv) sub-wave at the moment, and there's at least one more major impulse wave to go in the short-term pattern before we reach the top of Wave-3 on the weekly and monthly charts. 

HON Weekly Chart
The strong bullish channel pattern is evident on the weekly chart as well, and that pattern has been in play since October 2011.  The highest order Elliot Waves were determined from an analysis of the monthly chart and are shown in bold black here.  Now, multiple conflicting wave counts are possible, especially as we hit mid-2016, however in any of those counts the wave evidence suggests more room to the upside.

It's important to note the bearish divergence in the RSI(9) on the weekly chart, and we're seeing a downward trend in volume as well.  On Balance Volume on the weekly continues to rise, however so for now it appears demand remains strong.  The slope of the SMA(200) is very healthy and has been consistent since mid-2012.

The trade we see on this chart is to the long side.  With a stop just below the channel support line, I'd prefer to catch a pullback to either the EMA(10) or to that trend line, however I'm willing to enter long from here if I see a sign of strength coming off the open.  While there's a bit of resistance at $120, it's extremely week and not likely to hold once the next impulse starts.  That's a wave we'll try to catch early.

Happy Trading.

Thursday, January 12, 2017

Quintiles IMS Holdings Showing Weakness on Daily and Weekly Charts

A wedge pattern is not one of my preferred setups.  The breakout from such a pattern is fairly random, and the performance after the breakout is often lackluster at best.  Nonetheless, that's the pattern we're facing on the daily chart for Quintiles IMS Holdings (NYSE: Q), a mid-cap provider of bio-pharmaceutical development services as well as commercial outsourcing services in the health-care field.

Q Daily Chart
Since we know we really can't rely on the wedge pattern alone, let's review what other clues the chart has to offer.  It's hard to miss the twin towers of volume - in this case, supply - that dominate the landscape on 30 November and 1 December 2016.  While that pattern is symptomatic of climactic activity, it's not the first major indicator of weakness in the current pattern.  Look at the decline from 6 October to 1 November.  In that entire period, only four days were positive, and all four were extremely short candles compared with the rest of the save.  In total, over 11 points were traveled, forming both the top and bottom of the wedge.

When we look at the volume pattern, the amount of supply that's evident appears stronger than the amount of demand, and we can see the overall strength of the down days in general. As an added point of confirmation, the On Balance Volume (OBV) indicator (shown in orange above volume) continues to decline.  That's an indication that shares are being distributed, not accumulated, and it's an extremely bearish sign.

Curiously, we don't see a divergence on the daily RSI(9) oscillator.  Instead, it's merely echoing the price action.  In itself, it's not giving us much of a clue as to where Q intends to breakout, although the price action implies a downward break in the short-term.

Finally, notice the peaks on 5 October, 29 November, and 15 December.  With those peaks, we have at least a double top formation with the first two, and the last one arguably creates a triple top.  The pattern is not confirmed, of course, since we've yet to close below the neckline at $70.10, however it's definitely a major flashing warning light.

A double top appears on the weekly chart as well, and that formation is more ominous.  The left peak dates to late July 2015 and the right peak is in late September 2016.  The neckline on this longer term pattern is $55.01.  Note that meeting the price target of the daily chart double top would approach that weekly neckline.

Q Weekly Chart
Here's where things start to get interesting, though.  The weekly chart starts to bring an Elliott Wave pattern into context, and for the moment, at least, we appear to be in the waning stages of a Wave-2 correction.  The low of Wave-2 retraced 61.8% of Wave-1, so it was a deep correction, but in-line with all of the rules.  The next wave we'd expect on the weekly is a Wave-3 impulse that would, in this case, be an up-trend. 

That wedge we see on the daily chart extends out to an ascending triangle on the weekly chart.  That's also considered a bullish pattern.  The volume pattern is somewhat neutral on the weekly.  There's certainly some heavy supply early in the triangle, but following that one climactic week there hasn't been much follow-through in either direction.

The one major caution sign on the weekly chart is the RSI(9) oscillator.  Unlike the daily chart, there is definitely a bearish divergence on the weekly.  That's warning us of potential trouble ahead, and points to a possible downward break, at least for the short term.

Here's a case where we really need to give the stock some reins and see where it wants to lead us.  If we get a downside breakout on convincing volume, I'll play it.  The wedge is showing a potential 7 to 10 point move in either direction, and that's worth trying to capture.  A stop a few percent inside the pattern to give it room for a pullback would still be a good reward to risk ratio, and likely keep us out of a shakeout flip.

A break to the upside, however, may signal the start of Wave-3 on the weekly chart, and we definitely want to ride that one.  Again, however, we need to see convincing volume, especially given the number of failures off that resistance line thus far. 

That, in fact, is the third potential setup.  A failure off resistance will be an excellent short opportunity.  The moves down from resistance have been swift to date, and our stop would be just above the resistance line.  Again, that's a fantastic reward to risk ratio.

Let's see which of the setups will actually trigger.  With several very good plays lining up in either direction, we'll add this to our watch list.

Happy Trading.

Wednesday, January 11, 2017

AMAT Starting to Weaken in Extended Wave-3

2016 proved to be a strong year for semiconductor giant Applied Materials (NASDAQ: AMAT). The year started with the completion of Wave-2 on both the daily and weekly charts, and it's been a very strong extended Wave-3 right up through today's close. 

AMAT Daily Chart
This wave is a good example of an extended wave, and there's still life remaining in the stock as it nears the completion of sub-wave (v) near its 16-year split-adjusted high.  The rise has been slow and steady, rising in a relatively narrow channel at a comfortable slope throughout the 11-month pattern.

There are few warning signs on the daily chart that anything's about to change.  The RSI(9) oscillator hints at a bearish divergence, which makes sense if we're approaching the Wave-3 summit.  Volume, on the other hand, is still showing a decent amount of demand, and the stock continues to record both higher highs and higher lows.

The candlesticks themselves are undergoing a transformation, however, and that's the first possible clue that we're approaching the peak of Wave-3.  The long red candle on 1 December 2016 is the longest down day in well over a year, and that occurred on confirming volume.  We then have four consecutive down days from 28 December to 3 January, and in total those four red candles equaled the single day drop noted earlier.  Volume's tough to read in that time frame due to the slack holiday period, but the volume on 3 January as traders returned to their desks was notable.  So there's definitely some supply coming into play, here.

We've had three good days this week and volume was comparable to the candle lengths, so there's no sign yet of climactic activity.  It's worth noting, though, that we're starting to struggle to exceed the high of 22 December, and notice the candle on that day - an inverted hammer.  That's rarely a good sign at the top of an uptrend as it indicates potential price rejection.

Let's look at the weekly chart now and see if weakness is either confirmed or refuted.

AMAT Weekly Chart
Now we can see the entire three-wave pattern that's in flight. This impulse pattern dates back to November 2012, and we can see that Wave-1 lasted a full two-years.  (A check of the monthly chart - not shown here - confirms that this is, indeed, the start of the impulse pattern.)  Wave-2 was a deep correction, retracing almost to the 61.8% level, and it lasted about half as long as Wave-1. 

That's an important statistic to note since the alternation rule tells us Wave-4, whenever it occurs, must differ in either form or time (and usually both) from Wave-2.  We can therefore expect Wave-4 to be a shallow retracement - possibly to the 38.2% level - but relatively long.  That's fine with us since a long and shallow retracement will offer numerous swing-trade opportunities.

Anyway, look at the slope of Wave-3 on the weekly chart.  It's not quite as shallow as it looked on the daily, is it?  Certainly not as compared to the slope of Wave-1.  The duration is also much shorter, having already exceeded the distance traveled by Wave-1 but doing it in less than half the time.

The RSI(9) on the weekly chart confirms the bearish divergence, and it's much more pronounced than it is on the daily.  The divergence is evident when comparing the highs as well as the lows, so the evidence is mounting that our stock is weakening. 

Volume on the weekly is showing signs of fading as well. Again, we have to use caution when looking at the volume of the two weeks around the holidays, however even without those two weeks in the mix, the slope is definitely lower. 

Returning to the daily for our wrap-up, price right now is right in the middle of the channel that marks the entire uptrend.  This is not a position from which we would want to enter a trade to the long side since we're a pretty long distance from a viable support line.  Our reward to risk would be very poor in this situation.  Notice, though, that we are very close to a resistance line.  Given the relative weakness being demonstrated, I would be willing to enter short on a rejection of that resistance line.  There's a high probability that we'll pickup a couple of quick points on a retreat back to support, another possibility that we'll retreat all the way to the channel support, and it's also possible that we'll catch the start of Wave-4.  With a stop just above resistance, all of those possibilities become very attractive.  The key, however, is that we can't play it short unless there's a rejection of that resistance line.

The two key dates to remember for AMAT are both in February.  They report earnings after the close on 15 February, and they go ex-dividend (paying $0.10 per share) on 17 February.  We'll want to be out of any trades before those dates.  That shouldn't pose an issue, however, since Waves 4 and 5 should both run for a year or more (each) and offer numerous swing opportunities.  This stock is definitely one for the long-term watch list.

Happy Trading.

Tuesday, January 10, 2017

TEL Sitting On Support in Bull Channel on Daily Chart

TE Connectivity Ltd. (NYSE: TEL) spent virtually all of 2015 and 2016 in a Wave-4 complex correction on the weekly chart.  This corrective pattern developed a strong bull channel that ran from July 2016 through the present. A series of oscillations within the channel created numerous swing trade opportunities as the year progressed.  Whether or not another opportunity is presenting itself now is up for discussion.

TEL Daily Chart
As we've discussed previously, the time to enter a long position is when the stock is resting on a support line.  That's precisely where TEL sits today.  This particular support line formed as a major resistance line both in November 2015 and again in November 2016.  This increases the potential that it will carry some weight in its role as a support line now.  (Remember, once broken, a resistance line becomes a support line and vice versa.) 

If we back up one day and look at the candle that completed on 9 January, there's even stronger evidence that support may hold.  The extremely long shadow in yesterday's candle bounced off the support line directly below the current line, and it did so on very high volume.  The stock closed at the current support line, and that's essentially where it traded all day today.

So this is a solid entry and the stock's direction is up from here, right?  Well, not so fast.  What is somewhat troubling is the volume pattern on the current pullback from the stock's 52-week high.  Supply has been on the rise since we emerged from the holiday period and the true body of the daily candles have been longer to the downside than they have been to the upside.  There may be a fair amount of institutional selling underway, and if that's the case, this stock may well break to the downside.

There is still a fair amount of overlap in the pattern, so it doesn't feel like we've entered the next impulse wave - a wave that will be the fifth and final impulse on the long-term monthly chart.  The way the stock's behaving right now, it appears that this Wave-IV correction has at least one more leg to run before we can move to that impulse. 

The RSI(9) Oscillator isn't helping shed much light on the situation in this case.  Comparing the highs and the lows on the oscillator to their price counterparts on the chart, it appears the RSI on the daily chart is simply confirming the price action.  There's no hint of a divergence either way, just yet, and I would feel much more comfortable entering long if there were signs of a bullish divergence in the RSI.  There's not.

The weekly chart's a tad more interesting, however:

TEL Weekly Chart
From Wave III, the corrective pattern almost formed a nice triangle correction.  Almost, that is, were it not for a Wave-A that was too short by a long margin.  Still, the diagonal trend line along the top of the correction was decisive, with five separate touches before it was ultimately breached.  From there, two separate tests challenged the trend line, but again, it held its ground and price has moved consistently upward.

The moving averages are cooperating on the weekly, with the 200-period and 50-period all sloping upward.  The 10, 20, and 30 period averages are all in descending sequence, as befits a good uptrend. Thus far, the weekly candle bounced off the 20-period moving average, and with three days remaining before the candle closes, it shows a long shadow with a short body.  That's a bullish draw as it sits now, but of course, that can change over the next three days.

As is the case on the daily chart, the weekly RSI(9) oscillator is merely confirming price action, although it does have a definite bullish slant to the overall pattern.  The three bearish candles drawn off the 12 December peak are troubling, certainly, but not overly so.  Volume on the weekly chart has been modest, and the candle bodies are not especially long as compared to earlier waves.

So it comes down to this.  With price resting on support, is this the time to enter long?  I won't be, at least not just yet.  While the weekly is showing signs of strength, the daily is hinting that it's got a bit more pullback left in it, and I'd rather enter closer to the bottom of that pullback if possible.  The way I'm playing this is to watch how the next few candles develop.  If we break below the current support line, I'll watch for another consolidation pattern similar to the one in November when we last entered this range.  A breakout (either way) from that range would be a nice play since we'll either be going long off support or short off resistance.  Precisely the type entry we want. 

If, on the other hand, we break above the resistance line sitting right at the top of today's candle, then we'll enter long knowing that the resistance line pivoted and became a support line.  That line has some teeth as well since it has served as both support and resistance going back to November 2015.

Exercise a bit of patience on this one.  We need to give this stock a few more days to reveal which way it intends to run. 

Happy Trading.