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Beyond Meat upside target reached with exhaustion signals

Beyond Meat (BYND)


click to enlarge chart

Key elements

  • Since our last report dated on 12 Jul, Beyond Meat (BYND) has rallied as expected and met the medium-term upside target/resistance of 258.20 as per highlighted (click here for a recap).
  • It printed an intraday high of 239.71 on last Fri, 26 Jul. Thereafter, it has declined by 16% to print a low of 201.00 at the close of yesterday, 29 Jul U.S. session. After the close, BYND has reported better than expected revenue and reinforced its full-year outlook. However, it missed earnings consensus (-$0.24 EPS versus -$0.08 EPS). Also, it has announced a secondary stock offering just three months after is IPO. The share price of BYND continued to tumble by close to 12% in the after-hours session to print a low of 191.00.
  • Last three days of price action since 25 Jul, BYND has formed a daily bearish “Evening Star” candlestick pattern right at the 239.70 key medium-term resistance.
  • Interestingly, the 239.70 level is predetermined by a Fibonacci expansion level derived from Elliot Wave.
  • Last two days of trading has been accompanied by higher volume which tends to be accompanied by a medium-term reversal in price action coupled with the bearish “Evening Star” candlestick pattern.
  • Elliot Wave/fractal analysis has suggested that it may have completed the 5th wave impulsive upleg target, labelled as 5/ to complete entire medium-term bullish cycle in place since 02 May 2019 low. Thus, BYND is at risk now of shaping a significant correction of approximately 40% to retrace the prior bullish cycle.

Key Levels (1 to 3 weeks)

Pivot (key resistance): 239.70

Supports: 193.75 (trigger) & 142.36/138.00

Next resistances: 258.20 & 295.20 (Fibonacci expansion levels)

Conclusion

If the 239.70 key pivotal resistance is not surpassed and a break with a 4-hour close below 193.75 (also the ascending channel support) in the U.S. cash trading session is likely to trigger a potential multi-week corrective decline sequence to target the 142.36/138.00 support zone.

However, a clearance with a daily close above 239.70 invalidates the corrective decline scenario for an extension of the impulsive up move towards 258.20 and even 295.20 next.

Chart is from eSignal 


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