As noted below price did in fact move up from support and should that rise continue the $9.00 target remains in play.

STO 4June21

21 May 21

I'd be fairly happy with STO if I was holding it after buying, say last November when it made a technical buy signal. At the moment price is sitting close to but above a support line (the black solid line on the chart). It could fall back to $6.32 which is a level of support. Back in December I saw it had broken above a resistance level and made a target of $7.62 which it achieved exactly in mid-January (another small victory for the chartists!). Price usually falls back after achieving a target (because they form resistance) and STO was no exception. Incidentally, for the chartists, STO made a Wyckoff pattern which also predicted a top of $7.45

Anyway, assuming last weeks low was a trough then I'd see price as rising back to hopefully close above $7.80 and make a new target of $9.00. I'd need to see positive signs of price closing back above $7.25 to think about buying in.

The alternative view is that price could still fall a little lower to the support line before moving up, but the placement of the support line is subjective and could be a little lower or higher. 

The diagonal dashed black line is a technical uptrend line which price broke below and in so doing made a sell signal. If price closes lower next week it will confirm a formal downtrend which would cast a shadow over my view of higher prices.

Interestingly, the blue dashed line at the bottom of the chart is a rising support line that has held under price for 30 years (it looks flat due to the scale but it does actually slope up). As such STO is coming off a very significant low and generally higher prices could be expected and I'd see the stock as a good one to hold long term. That said, investors need to watch price actions as this current rise is part of what will probably be a long Elliott Wave wave 1 which could be expected to be followed by Wave 2 which usually loses about 75% of the gains of Wave 1. This is one reason why sit and hold practices don't give the most profitable outcome - but it all depends on how long-term your view is.

STO 21May21

30 December 2020

Since the post below, STO broke higher as hoped but then reversed off overhead resistance at $6.60 and fell to retest the prior $6.30 resistance level (now support). Price appears to be moving up again but the jury is still out on that one. Assuming it does move up to make new highs my new initial target is $7.38 being slightly lower than the $7.64 suggested previously. A higher secondary target of $7.87 is now on the cards as well.

STO 30Dec20

27 November 2020

Like numerous other stocks commented on this week, STO has made a new uptrend and making higher troughs and peaks on the weekly chart (except for the last trough which was $0.01 lower than the preceding trough). Having retested resistance at $6.32, STO has a price target of $7.64

STO 27Nov20

 

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Robert Norman

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Email: robert@sharecharting.com.au

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