Congratulations bulls, after 9 days of inability to close above the 6.97 level, with the help of the index market and the renewed belief that the market is going to have a "melt up", the bulls finally were able to make it happen.
The stock is now likely to move up to the 7.90 to 8.24 level where stronger resistance levels are found. To begin with, the 200-day MA is currently at 7.90, the 12-week high is at 8.24 and 2 decent weekly closes at 8.04/8.06 from August 2013 and from March of this year are found.
The mini breakout also suggests that the 6.70/6.75 level will now become short-term pivotal support and likely to hold up unless the index market fails to breakout as most analysts are expecting it to do so.
Nonetheless bulls, don't get all excited as this is more the market pulling you up than the stock itself moving up. As such, upside is likely to be somewhat limited. Nonetheless, if the bulls can generate a green weekly close (Fridays) above 8.04, it will generate enough buying interest for a rally up to the 9.10 level where the 200-week MA is currently at. That is a line that in order for it to be broken, the bulls will need positive news regarding the company itself (not the index market) to break.
Nonetheless, right now bask in the positive action being seen. You certainly have been waiting a long time for something positive to occur and it has now happened. Hopefully, the index market won't fall flat on its face.
Watch oil on Friday. If it closes above 49.63 (presently at 51.04) it will be a breakout that will likely carry it to the $70 level. If that occurs, the indexes are likely to go higher.
Everything in some way is market dependent. Ever heard of words like Recession, Correction, Depression?
Stocks are not necessarily tied in 1-1 with market moves all the time but do react to market conditions. Ever hear of the Asian markets reacting to the U.S. market or vice versa?
This is especially true when a stock is not moving on its own. Traders look for whatever could affect the stock and move the stock off of that.
You must not have been trading for very long but in the 39 years I have traded the market, the first thing I always look at is market condition and what is affecting the market and then look for what is moving the stock. You personally would be surprised to see how often stocks are affected by the overall market.
I put out this information (about the 6.97 daily close resistance level) on May 19th and to this date the bulls have been unable to close above that level. Over the past 7 days, the stock has closed at 6.92, at 6.95, at 6.89, at 6.97, at 6.85, at 6.95 and today it is once again likely to close somewhere within than range BUT "not above it".
Do you think the area has some importance? You BETCHA!!
The fact that the bulls have failed for 7 straight days and now the indexes may start heading lower due to the surprisingly bad Jobs report, it is highly likely that KNDI will be heading lower as well.