Weekly Time Frame: Cup and Handle Pattern

First, let's take a look at the weekly chart (Image 1). What stands out is the classic Cup and Handle pattern forming over the past few months. This pattern is a bullish continuation signal, indicating a potential breakout above the resistance level around $15.

Key Observations:

• Cup Formation: The rounded bottom, indicating the accumulation phase, has been forming since early 2022.

• Handle Formation: Recently, we've seen a slight pullback forming the handle, which is crucial before the breakout.

• Resistance Zone: The $15 level has been tested multiple times (highlighted by red arrows), and a breakout above this level could propel the stock higher.

Daily Time Frame: Ascending Triangle Pattern

Now, shifting our focus to the daily chart (Image 2), we observe an ascending triangle pattern, another bullish continuation pattern. This pattern has been developing alongside the weekly Cup and Handle, providing a strong confluence for a breakout.

Key Observations:

• Higher Lows: The stock has been making higher lows, as shown by the yellow trendline, indicating increasing buying pressure.

• Resistance Level: Similar to the weekly chart, the $15 level is the key resistance. A breakout above this could lead to a significant move upward.

• AVWAP Support: The stock recently bounced off its Anchored VWAP, providing additional support around the $13.50 level.

Multiple Time Frame Analysis

This trade idea exemplifies the power of multiple time frame analysis. By examining both the weekly and daily charts, we can see how the patterns complement each other. The daily ascending triangle pattern firing off could result in the larger weekly Cup and Handle pattern breaking out and firing as well. This alignment across multiple time frames increases the probability of a successful trade.

Trade Plan

1. Entry Point: Look for a breakout above the $15 resistance level on high volume.

2. Stop Loss: Place a stop loss below the trendline support around $13.50 to manage risk.

3. Target Price: The initial target could be the 127.2% Fibonacci extension level around $16.35, followed by the 161.8% extension at $17.84 if the momentum continues.

Conclusion

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