Breakout Play: Avalara
Jason Lubin October 9, 2020 11:15 AM
Upside breakout from a rectangle pattern.
On Thursday, Avalara (AVLR), a provider of software for compliance solutions, broke out to the upside of its 144.00 resistance level and closed above it, making a new all-time high.
Looking at a daily chart, Avalara's stock price broke out to the upside of a rectangle pattern that price has been bouncing around inside of since mid-June. The RSI shows bullish momentum and has just entered overbought territory holding above 70. Price will likely hold its momentum and advance further towards the first Fibonacci target of 168.00. Price will probably find resistance at 168.00 and dip down before breaking out above 168.00. If price gets above 168.00, then it should clear a path to the second Fibonacci target of 181.00. If price cannot hold above its new support level of 144.00 traders should not be to worried as price could bounce off of 133.00, which was a strong level inside of the rectangle pattern. However if price falls below 133.00, it could slip back to 114.00, where a rebound is possible but less likely. If price falls under 114.00, it would be a bearish signal that could send prices even lower.
Source: GAIN Capital, TradingView
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