Last week has been quiet compared to the previous weeks since January. At this point, the market is contemplating the next plan of action.

Is an upward swing is at hand? From the charts, there is indication that it might be the case. On figure 1, the weekly chart shows longer term support near 43.46 (bottom red horizontal line). Although the recent low is below $42.00, it’s the next level of support that we are concerned about. The resistance is near $46.60.

Figure 1 Weekly Chart

On figure 2 is the daily chart, there are two ways to look at the chart to form an objective opinion.

Figure 2 Daily Chart showing lower highs and higher highs

1. Price action -- price have been sinking lower and lower before March. But from that point price have been forming lower highs and higher highs (pink rectangle shades) are beginning to show up, indicating the more interested buyers are pushing prices higher (or sellers are dissipating). This is the time to decide if this is the ideal area to enter long positions. The minor support is drawn because of the three bars that had similar highs, indicating resistance for sellers (below the line) and support for buyers (above the line). This is the line that marks the bull/bear struggle. After so many lower highs and lower lows, when price went below $42.00 and turned back up immediately, it shows there are buyers at that zone. With every new high, brings more confidence from buyers to take it higher. Another way to look at it is a pattern called reverse head and shoulders.

Figure 3 Head and multiple shoulders

2. Price pattern -- This is not a typical textbook reverse Head-and-Shoulders. These ones seem to have more than 1 shoulder on each side, 2 on the left and 2 on the right. This pattern comes with a profit target, which is drawn at $52.43 (red horizontal line on top of chart). Heads-and-Shoulders are considered on the more reliable bottoming patterns.

So what is the verdict? Since both indicate a bullish bias, this stock looks bullish as likely to finish forming a lower high, that is, after lows and turning upwards, the lower high will have been established. From there, a long position can be taken. If the low continues lower and never turns back and even past the previous low, then all bets are off. Look for clues from the general market that may guide this stock up.