Stock of the day: NOKIA

By Tomasz Wisniewski|

Published: June 20 2023, 10:58 GMT+0

Stock of the day: NOKIA

Today’s stock analysis focuses on Nokia. At the end of the second half of April, Nokia demonstrated a significant long-term sell signal when the price broke from the triangle downwards, penetrating a key horizontal support at 4.2 euros.

However, since the start of May, we’ve seen a correction that currently manifests as a wedge pattern, marked on the chart with green lines. The first half of June tested the lower line of this pattern, and more recently, the upper line of this formation has been examined. If the wedge pattern continues, we should expect a short-term decline, though the wedge could potentially rise in the mid-term until it encounters the horizontal resistance at 4.2, marked with a yellow color on the chart.

So how should this be approached from a trading perspective? Given that the wedge is a trend continuation pattern, it suggests a breakout to the downside in this scenario. Therefore, a price break below the lower line of the wedge would generate a credible long-term sell signal. However, as long as the price remains within the wedge, traders may consider trading bounces off either the lower or upper line. This suggests that, in the mid-term, the price is likely to trend upwards.