Stocks of the day: Porsche

Here’s an update on Porsche, which was previously analyzed at the end of November. Back then, the situation on the chart was rather bad. The price was experiencing a hard time at its lowest levels since March. Although the sentiment was negative, we saw a light at the end of the tunnel and no, it was not a train. In the previous piece we wrote:

“Although the main sentiment is bearish, we are currently above two important supports. The first one is the long-term up trendline (orange) and the second one is the 38,2% Fibonacci. As long as we stay above those two, buyers can still have hope for some kind of a bounce, but the breakout of those two will be a definite long-term sell signal.”

These supports worked like a charm. The 38.2% and up trendline proved to be a real stronghold for buyers. The price reversed and climbed back above the neckline (blue) of the Head and Shoulders formation (green). All that (orange) was actually a false bearish breakout and is a buy signal itself. The current sentiment is back to positive. As long as the price stays above the blue line, buyers are winning.