Stock Analysis:-Best stocks to swing trade for next week – Newell Brands(NWL).
Newell Brands (NWL) Stock Technical Analysis: Friday, September 13, 2024
Newell Brands (NWL) stock closed at $7.83 on Friday, September 13, 2024. Let’s dive into the technical analysis of NWL, focusing on the monthly and weekly time frames to understand potential future price movements.
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Monthly Time Frame Analysis
In the larger monthly view, NWL has been in a clear downtrend for an extended period. The stock previously traded near $55 but has since consistently dropped, forming a series of lower lows (LL) and lower highs (LH) on the chart—a classic indication of a downtrend.
Key Insights on the Monthly Chart:
- Current Price Action: The stock has fallen significantly from its prior highs, and is now trading near $7.83.
- Strong Bullish Order Block Zone at $4.70: There is a notable bullish order block around the $4.70 price level. This area serves as a strong monthly demand zone and remains unmitigated. This means the stock hasn’t revisited this zone yet, which could indicate a potential bounce from this level once the price tests it.
- Potential Bounce: If the price touches this order block at $4.70, we may see a retracement move, leading to a price rebound. This kind of movement is typical after a stock reaches a significant demand zone.
- Bullish Divergence on RSI: The Relative Strength Index (RSI) on the monthly chart is showing bullish divergence. While the price has been making lower lows, the RSI is moving higher, indicating that the downward momentum may be slowing and a reversal could be in the cards.
Unmitigated Supply Zones on the Monthly Chart:
- First Supply Zone: $16.00
- Second Supply Zone: $25.00
These levels represent potential resistance areas where the price may face selling pressure if it moves higher.
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Weekly Time Frame Analysis
On the weekly chart, a few key developments support the potential for an upward move in the near term.
Key Insights on the Weekly Chart:
- Bullish Candle on July 22, 2024: A bullish ultra-high volume candle was formed on July 22, 2024, indicating strong buying interest. This is a significant signal, as high-volume candles often mark important turning points.
- 50 EMA Holding Strong at $8.90: If the price manages to hold above the 50-day exponential moving average (EMA) around $8.90 in the coming weeks, it could be a strong bullish signal for further upside movement.
- Upside Attempt After Testing Demand Zone: The stock has recently tested a weekly demand zone and is now attempting to move upward. This aligns with the bullish signals on the monthly chart, suggesting that a potential bounce is on the horizon.
Current Technical Setup and Trade Idea
Based on the current technical analysis, NWL appears poised for a bullish move, especially if it can hold certain key levels and follow through on the signals mentioned above.
Swing Trade Buy Idea:
- Buy Entry Range: $7.80 – $6.30
The ideal buying zone falls between $7.80 and $6.30, which aligns with the current price levels and potential dips into a stronger demand area. - Stop Loss (SL): $4.20
A stop-loss below $4.20 is suggested. This is crucial because if the price breaks below this level and closes, the bullish setup becomes invalid. - Target 1 (T1): $14.30
The first target for this trade is set at $14.30, offering significant upside potential if the bullish setup plays out.
Conclusion
n conclusion, Newell Brands (NWL) is showing signs of a potential bullish reversal, making it one of the best stocks to swing trade in the coming weeks.
The combination of a strong demand zone at $4.70, unmitigated supply zones above, and bullish divergence on the monthly RSI indicates that a retracement move to the upside could be on the horizon.
Additionally, key indicators such as the ultra-high volume candle on the weekly chart and the 50 EMA provide further confirmation of a possible upward momentum. However, traders should be cautious and set appropriate stop-losses, as the bullish scenario becomes invalid if the price breaks below $4.00.
For those seeking a swing trade opportunity, entering between $7.80 and $6.30 with a target of $14.30 could offer significant gains, making NWL one of the best stocks to swing trade in this current market environment.
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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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