The Key Takeaways
- Mobileye fell by 28% last week, as investors did not like the company’s presentation on autonomous driving at the CES trade show.
- After bottoming out in mid-September, the stock has trended higher within an orderly ascending channel, but recently found significant resistance near the pattern's upper trendline.
- Investors should watch crucial support levels on Mobileye's chart around $15, $12, and $10.50, while also monitoring a major overhead area near $24.
Mobileye Global’s (MBLY), shares have lost over a quarter in value since last week. Investors were not impressed by Mobileye Global’s autonomous driving presentation at the CES trade show.
Bloomberg Intelligence analyst Jake Silverman pointed to the fact that Amnon Shashua, CEO of the company at this highly anticipated event held in Las Vegas failed to provide an update on the commercial successes. This likely disappointed investors who were expecting a positive outcome after Amnon shashua unveiled driving assist technology promising at their capital markets day back in December.
Stocks of the Israeli company lost over half their value in 2018. Sales were pressured by customers with too much stock and an industry-wide slowdown, mainly due to uncertainty about global regulations for self-driving cars.
Mobileye’s shares dropped 7.7% on Friday to $15.65, as a result of a general decline in U.S. stock prices. The stock fell by 28% during the last week.
We will examine Mobileye’s price chart in detail and apply technical analysis to determine important levels.
Ascending Channel in Play
Mobileye has trended upwards since mid-September. The chart pattern consists of two ascending parallel lines.
More recently, though, it has run into resistance at the top of the chart near the trendline’s upper edge and 200-day MA. The Wednesday sell-off of 13% was the largest since August 1, last year.
In less than a fortnight, the relative strength (RSI) index has dropped from an overbought condition to below the threshold of 50.
If the stock is still in a downtrend, we need to identify important support levels. Also, we will point out an area that should be monitored if there’s a positive reversal.
Important Support Levels To Watch
The shares could fall to as low as $15 if the trendline below the channel is broken. Support may be found near the horizontal line which connects the August peak of the countertrend, September’s peak and the November pullback low.
If you sell below this price, the $12 mark comes into play. It is an area on the graph where shares could be bought near prices that are close to mid-October’s trough.
A further fall could bring the stock down to $10.50. Investors could look for shares around the fall low on the chart.
The Monitor’s Major Overhead area
Investors should be alerted at $24 during a price recovery. The traders who tried to take advantage of recent volatility in the stock may want to look for exits near a convergence between resistance at the prominent February low and the channel’s ascending trendline.
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The author of this article does not currently own any securities listed above.
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