AUBank Technical Signals Pointing to a 12% Upside

7 days agoThe recent movements in AUBank's stock chart warrant a closer examination.

Following a pronounced downtrend that commenced on January 13, the stock faced considerable challenges in regaining momentum, struggling for a sustained period to close above all relevant daily EMAs). This persistence in bearish sentiment had created a cautious approach among investors, further complicating the stock's recovery efforts.

However, the turning point came on Friday, August 30, when AUBank's shares finally managed to close above all daily moving averages, signaling a potential shift in market sentiment. This breakout was accompanied by a notable trading volume of 24M, suggesting that the upward movement was underpinned by strong investor interest.

Furthermore, this price action filled a previous gap on the chart, which often serves as an important technical indicator of a new bullish phase. Additionally, a downward trendline breakout was also observed during this period, reinforcing the notion that the bears may be losing control.

On the weekly chart, RSI has crossed above the 63 mark, indicating growing strength in the buying pressure. This upward movement in RSI contributes to the bullish narrative, suggesting that the stock may continue its ascent if this momentum is sustained.

In terms of price levels, I anticipate a potential retracement towards the 711 level, where the stock may offer a buying opportunity before it aims for the next resistance target at approximately 813 (12% Return). This anticipated movement aligns with a risk-to-reward ratio of 1:2, highlighting a well-structured approach for traders looking to capitalize on this setup, with support firmly positioned at 678 to manage downside risk.

Disclaimer: The information provided in this stock analysis is for informational and educational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor and conduct your own research before making any investment decisions.