Stock Analysis:-Best Stocks to Swing Trade for next month – Braskem SA (BAK).
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Best Stocks to Swing Trade: Braskem SA (BAK) Analysis
For swing traders searching for opportunities, Braskem SA (BAK) presents an intriguing setup for a potential buy trade. On Thursday, September 19, 2024, Braskem closed at $7.00. Let’s dive into the technical analysis of this stock to understand the potential for upward movement.
Monthly Time Frame Analysis
According to the monthly time frame, Braskem SA (BAK) has been trading in a persistent downtrend, forming a series of lower lows (LL) and lower highs (LH).
Currently, the stock is testing an unmitigated demand zone around the $5.00 price level, which serves as a crucial support.
In this scenario, the stock has already collected the retail stop losses and is attempting to start a bullish move to the upside. This presents a strong possibility of a rebound. Above the current price, there are two unmitigated supply zones:
- $14.00 – First supply zone.
- $22.00 – Second supply zone.
Given this setup, the stock is expected to bounce to the upside in the coming weeks.
Weekly Time Frame Insights
The weekly chart supports a potential bullish reversal, with the RSI (Relative Strength Index) showing a bullish divergence. This is a positive sign, as it often indicates that selling pressure is decreasing, and the stock is ready to move upward.
This divergence, combined with the stock testing a strong demand zone, suggests that Braskem could experience a significant bounce soon.
Key Levels to Watch
- Bullish Scenario: If the stock price remains above $5.00, the bullish setup is valid, and a move toward the unmitigated supply zones is expected.
- Invalidation of Bullish Setup: If the price breaks and closes below the $3.00 level, this bullish trade setup will be invalid.
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Buy Swing Trade Idea for Braskem SA (BAK)
For traders looking to enter a buy position, here’s a potential setup:
Buy Entry Range: $7 – $6
Stop Loss: $5.12
Target 1: $9.00
Target 2: $10.30
This trade idea offers a good risk-to-reward ratio, particularly if the stock rebounds from the demand zone as anticipated. The bullish divergence on the RSI adds further confidence to this setup.
Conclusion
Braskem SA (BAK) is positioned as one of the Best Stocks to Swing Trade for the coming weeks. Its technical indicators point to a potential bounce to the upside, making it an attractive buy for swing traders looking for profitable setups.
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Note: Always remember: risk no more than 1% per trade.” Keep trailing your stop loss to secure bigger profits.
Please note this is only an opinion and not financial advice.
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