The price of Stacks (STX) has broken above both the long-term and short-term patterns. It is expected to make a strong recovery in the near future.
Weekly Outlook
The price of Stacks (STX) has been trading within a descending wedge pattern since reaching the yearly high at $1.3 on March 20. Both the wedge’s resistance and support lines have been validated three times, confirming the pattern’s validity.
In the week from August 14 to 20, the wedge’s support line coincided with the previous long-term resistance at $0.4. Therefore, it is likely to provide strong support upon retesting.
Indeed, STX’s price bounced from this confluence point (green arrow) and broke above the wedge in the week from September 25 to October 1 with a bullish engulfing candlestick (green ellipse).
This indicates that the previous correction phase has ended, and a new uptrend may follow.
The formation of a bullish pin bar candle last week (yellow arrow) supports this possibility as it shows bulls actively buying at lower levels.
If the price continues to rise, the next significant resistance level is found at $0.83.
Symmetrical Triangle
The daily chart shows that STX’s price has broken above a symmetrical triangle, formed since bouncing from the $0.4 support mentioned above. The price has successfully confirmed the triangle’s resistance line as support (green arrow) yesterday.
This suggests that bulls have controlled the short-term price action.
The daily RSI (Relative Strength Index) supports this possibility by staying above the 50 levels and sloping upward.
A move equal to the triangle’s height will take the price to $0.7. This target is found by connecting the height of the pattern to the breakout point.
Conclusion
Technical indicators indicate that the STX price is poised for further upward movement. The immediate target is found at $0.7, with potential further gains up to $0.83.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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