With the recent massacre of Staples stock, look to any stock website and Staples shows a Strong SELL. But obviously. Looking from a purely technical perspective, the weekly chart on Staples gives a different view, with a great risk to reward potential. Let's take a look at how the technicals point to a possible BUY in Staples.
In the weekly chart below, let's start with Wolfe Waves. We see a bullish Wolfe Wave being formed, with all the four key points in the waves being formed. The fifth and the key wave pivot almost managed to respect the parallel trend line of 2 - 4.
After a bit of a bullish rise from the 'Sweet Zone' the recent drop in Staples looks more like just a temporary blip more than anything else.
What's interesting to note is that when the trendline, 2 - 4 is projected, we see that this extended trendline acted as a resistance against the most recent price action.
When we plot a temporary trendline against the trend, we see that this intermediary trendline was well respected twice and if current price action continues, we could very well see another test of this upward sloping trendline.
From the above, we can thus look to buying on this temporary dip, with stops in the region of $12 and a potential entry in the region of $13.5 through $14.
The Wolfe Waves, gives us a potential projection, upwards of $25, with the first target level being $23.5
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| Staples - Weekly Chart |
After a bit of a bullish rise from the 'Sweet Zone' the recent drop in Staples looks more like just a temporary blip more than anything else.
What's interesting to note is that when the trendline, 2 - 4 is projected, we see that this extended trendline acted as a resistance against the most recent price action.
When we plot a temporary trendline against the trend, we see that this intermediary trendline was well respected twice and if current price action continues, we could very well see another test of this upward sloping trendline.
From the above, we can thus look to buying on this temporary dip, with stops in the region of $12 and a potential entry in the region of $13.5 through $14.
The Wolfe Waves, gives us a potential projection, upwards of $25, with the first target level being $23.5
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