As the August analysis below suggested, price did fall back to the lower boundary of the small rising flag pattern befire heading up again and an agressive short term trade could have been to buy in when the move up materialised. If price can confidently break and close above the $220 resistance there is a potential target of $254 (a 15% gain). COH, despite having the occasional material pullback can be a good long-term hold for anyone familiar with trendline trading. The larger shaded are on the chart is a long-term price channel. Price is currently in an uptrend, making higher troughs and peaks on the weekly chart and possibly rising into Elliott Wave 5 (which, if correct, should see price back above the all-time high of $254 – but perhaps not by much).

21 August 2020

COH has been a stellar performer but its price fell 40% in the Covid drop of March 2020. It has recovered half those losses but has fallen into something of a consolidation pattern shown by a rising flag pattern (the smaller shaded area on the chart). The large shaded area is a price channel COH has been trading in for over 6 years. Price has resumed an uptrend but could retest the lower boundary of that channel as the present price rise and retracement is potentially Elliott Wave sub-waves 1 and 2 of a larger Wave 5. Price usually falls down out of rising flag patterns and if that happens to COH could fall back to around $165 before moving up strongly to possibly $265 or thereabouts. The alternative view is price could break up out of the rising flag pattern with the same $265 trajectory likely.

What am I looking for?: A rise above $220 would suggest price is likely to keep moving up. A fall down out of the flag channel would suggest further falls before a turn up.

Buy Signals: Price is trading above a weekly uptrend line and last week made a higher trough followed by a higher peak. The stock is technically a buy but there remains some questions about the short-term direction of price.

Backtest: COH is a difficult stock to find effective trading rules for given its saw-tooth chart pattern. The stock often falls below an uptrend for a little more than the usual 2 weekly closes sell signal before recovering strongly. Rules suggested buy backtest showed a buy signal was current.

Summary: Reasonable likelihood price will rise strongly from its present level once it breaks out if the current consolidation pattern but potential to retest lows and continued range bound volatility exist. Recent buy signal supports a medium risk entry.

COH 28Sept2020

21 August 2020

COH did head back towards my $200 resistance level but in reaching it, price became rangebound to track sideways. I topped up my holding on 16 April (because price rose to $199) and again on 19 June when price appeared to be confirming a new uptrend line and a resistance break target of $217. Price rose 8% on 18 August to close at $217.74 and see this profitable trade realised .

COH 21Aug2020

 

6 April 2020

I bought a small parcel of COH based on it having been a long-term strong performer prior to Covid and having fallen back to the bottom of a long-term price channel, I felt the odds of a move up were good. On the daily chart price had fallen back 50% of the rise from the low and was again moving up. I should say the buy was outside of my trading rules as it hadn’t made a higher low followed by a higher high on the weekly – but price remained in a formal uptrend. The was also a strong level of overhead resistance around $200 and if price rose to break that level there was a strong potential for price to jump significantly.

COH 6Apr2020

Contact

Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

Sorry, this website uses features that your browser doesn’t support. Upgrade to a newer version of Firefox, Chrome, Safari, or Edge and you’ll be all set.