ADOBE, Major Break Below Key Trendline, Continuation Possible!

19. Juli 2020

Hello Traders Investors And Community, welcome to this analysis about the stock market and a single stock value ADOBE INC, we are looking at the 4-hour timeframe perspective, the recent events, the current interesting formational structure and finally what we can expect from the stock the next days, hours and weeks. I already mentioned PAYPAL some days ago which is actually building a really similar formation to the one in within this stock, I highly recommend you to watch this to have a full-depth-overview and a suitable to this stock, furthermore, this does not mean the whole stock market is building the same structure there are stocks which looking still bullish and strong while stocks which even did not rally and trading below the established all-time-highs.

As you can watch when looking at my chart is that ADBE INC just fell below this meaningful trendline which is marked in red, this trendline held the whole uptrend to the upside and is now broken to the downside which is firstly a strong bearish signal, besides that the breakdown occurred with high volume as you can see in my chart which is increasing the strongness of this move. Another factor which is also confirming the actual current bearish pressure is the fact that ADBE INC builds a possible head and shoulder reversal top formation here which you can see marked with the blue neckline and the other details of this formation, currently forming the right shoulder of this formation.

Taking all these signs into consideration we can assume that the volatile bearish breakdowns seen since the established highs aren't over yet and a great possibility is given for continuation to the downside when the head and shoulder confirm properly. When this happens and the neckline breaks to the downside the head and shoulder target zone marked in green in the 370-365 level will be activated. On the way to this target zone, there is still strong resistance formed by previous highs at 385 but when the trend is strong enough this can only play a marginal role. Overall it is a high possible bearish setup when the head and shoulder confirms which can be traded either aggressive with immediate entry or conservative with an entry below the neckline confirmation.

As more than one stocks in the bigger market cap stocks showing these bearish signs which before showed strongness and rallied to new highs, it should be considered with caution because it can indicate a follow up of other stocks in the large market-caps which can signal a possible bearish shape in the rest market, as the corona pandemic is still going on and a second way is not from the desk we should not keep the bearish perspective out of the sight now as the S&P is still below its all-time-high and did not confirm the full bullish continuation and bear-market-ending till now. We will examine how this whole situation develops and if these are just correction or resulting in bigger and stronger bearish environments concerning other stocks and main market also.

In this manner, thank you for watching, support for more market insight, have a great day, and all the best to you!
Enlightenment is under our feet as well as over our heads.

Information provided is only educational and should not be used to take action in the markets.