Chart of the week: An excellent FTSE 100 trade

TL;DR

Next PLC stock has been in a long-term bull market, but is currently showing signs of a potential reversal.

Transcript

now this is a weekly very long-term chart of next PLC and you can see that it's been in a tremendous bull market for many years it is one of the darlings of the stock market at one time and if you follow the waves this cycle is wave 3 I couldn't show the previous waves because I don't have the chart going back enough but but that's wave 3 this is w... Read More

Key Insights

• ❓ Next PLC has been a favored stock in the market for several years.
• 👋 The long-term chart shows a potential reversal based on wave analysis and momentum divergence.
• 🥹 The stock experienced a significant decline, resulting in losses for buy-and-hold investors.
• 🎚️ The daily chart shows support levels, a rebounding market, and key levels to watch for potential future movements.
• 🍰 Short covering and better-than-expected Christmas trading results caused a sharp rebound, but the overall trend remains bearish.
• 💹 The Fibonacci and chart resistance area indicate potential resistance for the stock.
• 😘 The t3 support area may be tested again in the future, with a potential break and move towards the previous low.

Questions & Answers

Q: What is the current trend of Next PLC stock?

Next PLC stock has been in a bull market for many years, but is currently in a downward trend, indicated by wave C on the long-term chart.

Q: What is the significance of the momentum divergence in the fifth wave?

The momentum divergence in the fifth wave suggests a potential reversal, as the high has lower momentum compared to a previous lower high. This signaled a shift in market sentiment.

Q: Why did Next PLC experience a significant drop in value?

The stock experienced a significant drop of around 60% due to a combination of factors, including internal trend line breaks and market conditions. This resulted in losses for buy-and-hold investors.

Q: What are the key levels and indicators to watch in the daily chart?

The daily chart shows key tram lines, support from the t3 line, and a Fibonacci and chart resistance area. Additionally, there is a momentum divergence indicating a potential reversal.

Summary & Key Takeaways

• Next PLC has been in a strong bull market for many years, with wave 3 being the most recent cycle.

• The stock experienced a significant drop, losing around 60% of its value, and is now in wave C.

• The daily chart shows the stock testing support levels and experiencing a rebound, but with potential for further decline.