SDGR - Bullish divergence

31 jul 2023

SDGR has been in an uptrend since breaking above its Base Formation neckline around $36.30, experienced several retracements of between 38.2% to 50% of each mini swings on the way up.

Its most recent retracement is more "severe", now at 61.8% retracement. And with Earnings expected just round the corner (on 2nd Aug), it appears there is some "fear" leading to earnings announcement.

Bullish divergence has begun to appear between price and RSI, hence it would be interesting to see if earnings would be the catalyst for the next rebound. NOT suggesting to take a position now (before earnings release) unless you are prepared for earnings risks.

Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!

18 sept 2023

Nota

SDGR appears to be finding support at its 78.6% fib retracement last Friday, showing relative strength on a day when the general market was very weak.

The bullish divergence on its daily is still valid as of now. A short term bouce could materialise in the near term (*see Note below), validated if we see a bounce above 33.40 soon.
However, while it may be finding support, it may also continue to consolidate within the longer term "neckline zone" (33-35) for some time.

I may consider a swing trade on the long side only if and when it is able to break above 35 (preferably on strong volume), with initial stop @ 32.40 (just slight below Friday's low).

Trailing our protective stops upwards as trades goes our way is important in this volatile market!

*Note: a bullish divergence is only good for predicting "short term" bounce, lasting 2-3 candles on the average) and may not necessarily translate into longer term trend reversals