Paramount (PARA) Flirting with Historical Support, Time to Buy?Hi Guys. As usual always on the lookout for Macro trend setups, signs and opportunities. PARA seems to be in a position of low risk trade setup.
We have made it to a Historical Support level, where interactions here normally leads to bounces upward.
Please note however that previous history does not mean it is 100% probable that it will repeat.
HOwever, being in a downtrend for some time now. It is likely that there maybe DEMAND in this area. Its important to watch for signs of confirmation of Support.
This weeks candle may show signs. It is a Hammer candle printing at the bottom of a downtrend since January. Lower wick indicates buy pressure or demand.
Notice ABOVE we have a resistance trendline. Note if we bounce from here, that will be our area to watch. This resistance trendline has been dragging us down since April 2022.
We could also be attempting to form a double bottom.
Recently there is also an uptick in VOLUME, which can indicate support of the demand currently seen at this support lvl.
Ive added 2 indicators.
MACD shows that we have not reached ABOVE the 0 lvl in quite sometime. Hinting to the idea that eventually we will.
Notice also the presence of Bullish Divergence with MACD and price action.
Watch for the change in color of the histobars to light red. This will suppport the idea of waning bearish momentum. The presence of a bullish cross is also vital to watch for.
Now notice RSI. Our current RSI as indicated by orange circle, shows flattening of the RSI. This shows buying is stalling the sell off.
However, notice the rectangles highlighting previous flattening of RSI. There is a possibility of RSI continuing downward. An important sign for the RSI in my opinion would be if RSI can move above the resistance trendline. This thinking ahead, can coincide with breaking the Major resistance in price action.
Regardless of what happens, right now we are in a critical area and pushes for observation.
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DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
