Momentum Shift: Analyzing CHRW's Breakout

Welcome to this week’s newsletter, where we delve into the latest technical setups and trading insights. In this edition, we’ll be focusing on C.H. Robinson Worldwide, Inc. (CHRW), examining the recent momentum thrusts, key technical patterns, and pivotal levels across multiple timeframes. Whether you’re a seasoned trader or just getting started, our detailed analysis will provide you with actionable insights to navigate the market effectively. Let’s dive in!

Momentum Thrust on Weekly Chart

Let's dive into C.H. Robinson Worldwide, Inc. (CHRW), where recent activity suggests a significant shift in momentum. The first chart we will look showcases the 5 period Rate of Change (ROC) on a weekly timeframe. Highlighted in green circles, we can see that each time we've experienced these momentum thrusts since 2010, it often signifies a change in the stock's tone, typically followed by higher prices. We recently saw another one of these momentum thrusts, followed by higher prices once again.

Plumber's Pivot on Monthly Chart

Next, we explore the monthly timeframe. Here, we see a pattern known as the Plumber's Pivot. For those unfamiliar with this term, it occurs when the price breaks through support, leading overly aggressive shorts to get squeezed out once support is reclaimed. False moves often lead to fast moves, and as evident on the monthly chart for CHRW, we've seen a rapid recovery once the support was reclaimed.

For more detailed information on the Plumber's Pivot pattern, read my article here.

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Weekly Chart: AVWAP & Fibonacci Levels 

Moving to the weekly chart, we see significant technical developments. CHRW is now trading above the Anchored VWAP (AVWAP) from the Summer 2022 highs, a sign that buyers are starting to take control. This level is crucial for sustained upside. Additionally, the stock is trading above the 38.2% Fibonacci retracement level, another key threshold that needs to hold for bullish momentum to continue. Finally, CHRW has not only broken out but retest and bounced off it’s trendline, reinforcing the positive outlook.

Daily Chart: Multi-Year Base & Technical Indicators

The daily chart reveals even more promising setups. CHRW is forming a large multi-year base. This follows a climb higher after an island bottom reversal and testing a former demand zone. This zone, which turned into overhead supply, has been tested multiple times since last summer. Reclaiming this area as support/demand is a strong bullish signal to watch for. Moreover, CHRW is trading above the AVWAP from the February 2023 highs. The RSI has broken out of its trend line, and the MACD has made a bullish crossover, further solidifying the bullish case.

Earnings Reminder

As a final reminder, it's earnings season, and CHRW is set to report at the end of the month. Earnings reports are a binary catalyst that can either bring all our technical analysis to fruition or completely invalidate it. Stay vigilant and manage your trades accordingly. Happy trading!

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