Technical Analysis of Cognizant Technology Solutions ( CTSH )
Disclaimer: I don’t own shares of Cognizant Technology Solutions ( CTSH )
The below analysis is not a trading or investment recommendation & is only for learning purpose.
1. CTSH entered a long-term uptrend in Nov’21 with price closing above the 200MA.
2.Price broke the previous high around $83 after having retraced 38% to $66.
3.Price has formed a double top structure on the daily chart with the neckline around $80 showing failure of bullish momentum to break above the previous high around $92 & sustain higher.
This is also supported by unconfirmed RSI bearish divergence on the daily chart ; however, price hasn’t broken the trendline yet. A break of the trendline would confirm the bearish divergence between price & RSI .
4.Price is receiving support around the high of the previous consolidation area around $82 indicating no strong interest on the seller’s side to break the $82 support & take it lower.
5.Price volume analysis indicates that the current up move $66 to $92 has not been backed by a significant increase in volume . A strong uptrend is usually supported by a large increase in volume igniting the move followed by bouts of high volume to keep the momentum intact, both of which are missing.
6. For the next leg of up move, price needs to have a close above $93 with increased volume & sustain itself.
7. A break below the neckline around $80 could push the price down to the 200MA around $77 being the first level of support.
8. In the long term after the resistance at $93 is taken out, the stock should eventually reach $109 completing an AB=CD pattern.
All the best!
The below analysis is not a trading or investment recommendation & is only for learning purpose.
1. CTSH entered a long-term uptrend in Nov’21 with price closing above the 200MA.
2.Price broke the previous high around $83 after having retraced 38% to $66.
3.Price has formed a double top structure on the daily chart with the neckline around $80 showing failure of bullish momentum to break above the previous high around $92 & sustain higher.
This is also supported by unconfirmed RSI bearish divergence on the daily chart ; however, price hasn’t broken the trendline yet. A break of the trendline would confirm the bearish divergence between price & RSI .
4.Price is receiving support around the high of the previous consolidation area around $82 indicating no strong interest on the seller’s side to break the $82 support & take it lower.
5.Price volume analysis indicates that the current up move $66 to $92 has not been backed by a significant increase in volume . A strong uptrend is usually supported by a large increase in volume igniting the move followed by bouts of high volume to keep the momentum intact, both of which are missing.
6. For the next leg of up move, price needs to have a close above $93 with increased volume & sustain itself.
7. A break below the neckline around $80 could push the price down to the 200MA around $77 being the first level of support.
8. In the long term after the resistance at $93 is taken out, the stock should eventually reach $109 completing an AB=CD pattern.
All the best!
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