Stock of the day: Adobe

Today, we are coming back to Adobe, which we analyzed for the last time at the beginning of April. Back then, the price had a nice bullish formation but it was not active yet as Adobe was trading below crucial resistances. This is how we concluded this setup:

“What should activate the buy signal here? One thing really: The price closing a day above those three resistances, and that’s what buyers should definitely anticipate. On the other hand, if the price fails to break those levels and bounces off the neckline it will bring a sell signal. As long as we stay below that level, we can’t exclude that scenario.”

This is why you should usually wait for the breakout. If it does not happen, there is no signal. In this case, it did not happen and Adobe kept falling till the very beginning of November. Now we are close to another bullish signal but again…we need to wait for the breakout first. Currently, Adobe is on the combination of two key resistances. The first one is a horizontal one on the 350 USD (yellow), which was a support in June and already a resistance in November. The second one is the long-term down trendline (red).

Price closing a day above those two will be a legitimate, long-term buy signal but as long as we stay below, buyers have to hold their horses.