Northern Genesis Acquisition NGA shares gapped up Monday following the company’s SPAC merger partner Lion Electric's announcement of the construction of a new plant.
Technical Levels to Watch: The 5-minute chart above shows what technical traders may call an ascending triangle pattern. The stock broke out of the pattern and now may retest the $18 as support, as this level was the previous resistance of the pattern.
The stock is holding above the 200-day moving average (blue line) which to technical traders is a bullish sign. The stock is holding below the VWAP (pink line) and this may be an area of short term resistance.
The daily chart shows that the stock has been in a downtrend for the last three months. This can be seen by the downtrending line connected by the highs.
The chart shows a possible resistance level near $22. This level previously held as support, but eventually did break through the support and fall lower.
The arrow indicates a hammer candle formed on the daily chart, a promising sign to bulls who trade technically. This candle may mean that the chart has hammered out a bottom and will start to move higher.
Bulls like the hammer candle that has formed as well as the stock breaking above the downtrending line. The next thing bulls may like to see is a break over the $22 level with some consolidation before the stock may move higher.
Bears may see the descending triangle pattern formed by the downtrend condensing into support before the price falls through the support.
This level was retested as resistance before the price moved lower. Bears would like to see this level hold as a potential resistance level again in the future. If the stock is unable to break above, the price may fall lower from the potential resistance.
Northern Genesis is trading with a market cap of $706 million.
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