Chart of the week: Good backdrop for a surprise rally

TL;DR

BAT and other tobacco stocks are showing potential for a surprise rally despite negative sentiment in the industry.

Transcript

hello it's John Burford with chart of the week for Monday the 30th of September and this time I'm covering British American Tobacco be a tea and this would be my I think third coverage I started covering it back here in January when the market was still in a very hard decline and my analysis are in my January chart of the week pointed to this area ... Read More

Key Insights

• 👋 BAT has shown a beautiful five-wave wedge pattern, indicating a potential third wave up.
• 😮 Negative sentiment in the tobacco industry may serve as a good backdrop for a surprise rally in tobacco stocks.
• 🇵🇭 Similar patterns can be observed in stocks of other tobacco giants like Imperial Brands and Philip Morris, suggesting a possible rally in the industry as a whole.
• ❓ BAT's current momentum divergence indicates a more immediate bullish phase.
• 👋 Imperial Brands stock shows a potential rally in wave B after a collapse in wave C.
• 👋 Philip Morris stock has shown a breakout from a wedge pattern and a 1 2 3 4 5 wave move down, suggesting a potential rally in wave C of wave 2.
• 👀 The immediate picture looks quite bullish for tobacco stocks, with momentum divergences indicating potential rallies.

Questions & Answers

Q: What patterns are seen in the BAT stock analysis?

The BAT stock has shown a five-wave wedge pattern, suggesting a potential third wave up. This pattern indicates a bullish trend and potential for a rally.

Q: How has negative sentiment affected the tobacco industry?

Negative sentiment in the tobacco industry, caused by factors like the vaping health scare and failed merger talks, may actually serve as a good backdrop for a surprise rally in tobacco stocks.

Q: What is the comparison between BAT and Imperial Brands stock?

Both BAT and Imperial Brands stocks show similar patterns, with five-wave structures and potential for rallies. However, BAT's current momentum divergence indicates a more immediate bullish phase.

Q: Can a rally be expected in Philip Morris stock?

Yes, the analysis of Philip Morris stock also suggests a potential rally. The stock has shown a wedge pattern break out and a 1 2 3 4 5 wave move down, indicating a potential rally in the C wave of wave 2.

Summary & Key Takeaways

• BAT shares experienced a major low in January and have since shown a beautiful five-wave wedge pattern, indicating a potential third wave up.

• Despite recent knocks to the tobacco industry, such as the vaping health scare and failed merger talks, negative sentiment may serve as a good backdrop for a surprise rally.

• Similar patterns can be observed in stocks of other tobacco giants like Imperial Brands and Philip Morris, suggesting a possible rally in the industry as a whole.