Hi Guys! This is a Technical Analysis for Oatly (OTLY), on the 3 Day Timeframe.
New candle starts today
So the question here is whether or not OTLY is dead and if its going to 0?
It may seem like that but when "Checking underneath the hood" with TA, things become clearer and you can understand whats going on objectively with a level head.
So we've come down signficantly from around the highs of $29, about a 95% drop to current prices.
And its been alooooong time we've been on this downtrend, about 781 days.
In my case though, the question i've been asking with Stocks such as OTLY or SPCE or BYND or CVNA (before the massive run) is whether or not there are signs of bottoming?
And with such a new stock, it can be a little difficult to assess since theres not as much data points to go with.
But you can still make do with what you got!
We are Currently 4 RED candles in, watch the size of our current candle. IF at the CLOSE of this current candle, the body of it is small, that can be an indication of BEARISH momentum decline.
Notice how we got our most recent DOWNTREND, it is due to the RED circle that indicates price hitting a convergence of Resistance:
1. the 50 Simple moving average
2. a RESISTANCE trend line from 08/2022.
We are now nearing our previous low of around $1.35. Which is MAJOR SUPPORT.
Notice the 2 GREEN CIRCLES -> Provided we don't breakdown below $1.35, this can be a DOUBLE BOTTOM pattern.
We have to watch the next couple weeks of how we interact with SUPPORT.
NOTE: This MAJOR SUPPORT hasnt had 3 touches, which in TREND theory, it states that usually a minimum of 3 touches are needed on trend lines for it to be significant.
So, this can be an area we BOUNCE from in the SHORT-Term -> back to the BLACK resistance line or RED Resistance line
There is also a RISK of a Descending triangle playing out, where we break below the "MAJOR SUPPORT". Measured Target would be $0.58-0.60 cent level.
But again TA is about taking it 1 step at a time. To even think about this i would need:
1. Candle close BELOW MAJOR SUPPORT
2. CONFIRMATION
-> In the form of candle patterns
-> Re-test of the SUPPORT turned as RESISTANCE and a Rejection back down.
It absolutely does not have to play out this way BUT a scenario could be that we bounce from here, test the 08/22 RESISTANCE and come back down to test MAJOR SUPPORT level.
It is also possible that we MOVE SIDEWAYS (Within ORANGE Rectangle zone). With the Volume currently in a DECLINE, marked by the BLUE moving average. This means volatility will come down, leading to the probability of sideways action.
Now Check out the RSI, we have printed a Lower Low. This could lead to further DECLINE of RSI. WE are also BELOW the BLACK RSI Moving average, which can be indicative of further price declines.
STOCH RSI, is making its way below the 20 level. We will have to see how long we stay once we get below it and how low we actually get. Longer we stay below, higher the probability of further declines.
MACD -> a momentum indicator, is currently printing RED histograms. This is a BEARISH Signal. We dont want the bars to get massively big in size.
CONCLUSION:
Price declines of massive proportions can be extremely scarey and a place for capitulation, where people give up. This often times leads to further decline of price. However through all that, if you stay level headed with TA, you consider or pose the question..... Yeah, but is it showing any BOTTOMING signs? OTLY is 95% from its lows, we are currently back to MAJOR SUPPORT. This can be indication of a DOUBLE BOTTOM but in my opinion, its still too EARLY to tell. Especially with indicators still showing signs of a chance for more downside. I would need to see confirmation.
Stay tuned for more updates on OTLY in the near future.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. When trading always spend majority of your time on risk management strategy.
New candle starts today
So the question here is whether or not OTLY is dead and if its going to 0?
It may seem like that but when "Checking underneath the hood" with TA, things become clearer and you can understand whats going on objectively with a level head.
So we've come down signficantly from around the highs of $29, about a 95% drop to current prices.
And its been alooooong time we've been on this downtrend, about 781 days.
In my case though, the question i've been asking with Stocks such as OTLY or SPCE or BYND or CVNA (before the massive run) is whether or not there are signs of bottoming?
And with such a new stock, it can be a little difficult to assess since theres not as much data points to go with.
But you can still make do with what you got!
We are Currently 4 RED candles in, watch the size of our current candle. IF at the CLOSE of this current candle, the body of it is small, that can be an indication of BEARISH momentum decline.
Notice how we got our most recent DOWNTREND, it is due to the RED circle that indicates price hitting a convergence of Resistance:
1. the 50 Simple moving average
2. a RESISTANCE trend line from 08/2022.
We are now nearing our previous low of around $1.35. Which is MAJOR SUPPORT.
Notice the 2 GREEN CIRCLES -> Provided we don't breakdown below $1.35, this can be a DOUBLE BOTTOM pattern.
We have to watch the next couple weeks of how we interact with SUPPORT.
NOTE: This MAJOR SUPPORT hasnt had 3 touches, which in TREND theory, it states that usually a minimum of 3 touches are needed on trend lines for it to be significant.
So, this can be an area we BOUNCE from in the SHORT-Term -> back to the BLACK resistance line or RED Resistance line
There is also a RISK of a Descending triangle playing out, where we break below the "MAJOR SUPPORT". Measured Target would be $0.58-0.60 cent level.
But again TA is about taking it 1 step at a time. To even think about this i would need:
1. Candle close BELOW MAJOR SUPPORT
2. CONFIRMATION
-> In the form of candle patterns
-> Re-test of the SUPPORT turned as RESISTANCE and a Rejection back down.
It absolutely does not have to play out this way BUT a scenario could be that we bounce from here, test the 08/22 RESISTANCE and come back down to test MAJOR SUPPORT level.
It is also possible that we MOVE SIDEWAYS (Within ORANGE Rectangle zone). With the Volume currently in a DECLINE, marked by the BLUE moving average. This means volatility will come down, leading to the probability of sideways action.
Now Check out the RSI, we have printed a Lower Low. This could lead to further DECLINE of RSI. WE are also BELOW the BLACK RSI Moving average, which can be indicative of further price declines.
STOCH RSI, is making its way below the 20 level. We will have to see how long we stay once we get below it and how low we actually get. Longer we stay below, higher the probability of further declines.
MACD -> a momentum indicator, is currently printing RED histograms. This is a BEARISH Signal. We dont want the bars to get massively big in size.
CONCLUSION:
Price declines of massive proportions can be extremely scarey and a place for capitulation, where people give up. This often times leads to further decline of price. However through all that, if you stay level headed with TA, you consider or pose the question..... Yeah, but is it showing any BOTTOMING signs? OTLY is 95% from its lows, we are currently back to MAJOR SUPPORT. This can be indication of a DOUBLE BOTTOM but in my opinion, its still too EARLY to tell. Especially with indicators still showing signs of a chance for more downside. I would need to see confirmation.
Stay tuned for more updates on OTLY in the near future.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. When trading always spend majority of your time on risk management strategy.
Comment:
OTLY Up 8% since me posting this, strong bounce from MAJOR SUPPORT
