HEXO Bullish Divergence| Seller Exhaustion| Local Resistance

7. Feb. 2020

Hello Traders!

Today’s chart update will be on HEXO CORP where we have a probable bullish divergence forming on the daily. Local resistance is a key level to break to show first signs of a possible trend change.

Points to consider,
- Clear bear trend intact
- Bullish divergence forming
- Local resistance to break
- Stochastics in upper regions
- RSI respecting trend
- Volume below average

HEXO’s current trend is bearish with consecutive lower highs in place, this current bullish divergence signals potential seller exhaustion on the daily.

Local resistance needs to break; this will further bring the bullish divergence to fruition as the trend attempts to put in a higher low. The stochastics is trading in the lower regions, can stay here for an extended period of time, however lots of stored momentum to the upside.

RSI is currently diverging from price by putting in higher lows whilst HEXO puts in consecutive lower lows, confirming a valid bullish divergence .

The current volume is well below average, it must increase when local resistance is broken to avoid the chances of a false break.

Overall, in my opinion, HEXO’s bullish divergence is the first sign of a potential trend reversal from such lows. Local resistance is the first key technical level to breach then structural resistance in order to change the current market structure.

What are your thoughts?

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And remember,

“Environmental distractions and boredom cause a lack of focus – All of us have limits to our attention span and these are easily taxed during quiet times in the market.” Brett Steenbarger