Last week, the five biggest winners in the stock market made huge moves ranging from 54% to 79%. Below is an overview of each action and what it might have in the cards going forward.
Xiaobai maimai (NASDAQ: HX) climbed 79.33% between Oct.11 and Oct.15, to a 52-week high of $ 6.54. On Monday, the stock traded a little higher while entering a phase of consolidation on shorter time frames.
Xiaobai’s Relative Strength Index (RSI) is around 94%, which puts it well in overbought territory. When a stock’s RSI reaches or exceeds the 70% mark, it can be a sell signal for technical traders.
Xiaobai could work on setting up a bullish flag on the daily chart, with the mast being created between October 11 and Friday and the flag possibly starting on Monday. Monday’s action also placed Xiaobai in an inner bar pattern on the daily chart. In this case, the pattern is considered bullish because the stock was trading in an uptrend before the pattern was created.
- The bulls want to see continued consolidation on lower volume to cool the stock’s RSI and give Xiaobai the strength to move up. Xiaobai has resistance above $ 6.60 and $ 735.
- The bears want to see the increase in bearish volume push the stock below the $ 5.70 mark. Below the zone, Xiaobai has support at $ 4.20.
Server Holdings, Inc (NASDAQ: WTRH) gained 70.39% last week after breaking through a downtrend line that has kept the stock in a downtrend since February 22. On Monday, Waitr broke through Friday’s day high but has so far failed to muster enough momentum for on-the-go follow-up.
The stock has a spread below 85 cents and $ 1.01 and as the spreads on the charts fill about 90% of the time, it is likely that Waitr will move back into the range in the future. At the moment, however, Waitr looks solid due to the high volume of the action, indicating a high level of investor interest.
- The bulls want to see a sideways consolidation in order to cool the RSI of Waitr, which like the Xiaobai stock is in overbought territory, then big bullish volume to push the stock above a resistance level at $ 1.78. Above the level there is additional resistance near $ 2.
- The bears want to see Waitr’s bearish volume fall back below the $ 1.30 level. If the stock loses the support zone, it could drop towards $ 1, which would put it in gap-filling territory.
Huadi International Group Co, Ltd (NASDAQ: HUDI) was the third biggest winner last week with an increase of 59.74%. On Monday, the stock was trading up 8% on both bullish momentum and lack of resistance above the $ 7.20 area.
Like Xiaobai and Waitr, Huadi’s RSI is in overbought territory, which is currently the only red flag on the chart. It should be noted, however, that the RSI of a stock can remain extended for long periods before correcting itself.
- Bulls want to watch for large, sustained bullish volume, and then possible consolidation on low bearish volume. Rising bearish volume would be the first warning sign that the race may be over. The only resistance above, in the form of price history, is at Huadi’s all-time high on January 22 at $ 9.92.
- The bears want to see a big bearish volume come in and push the stock down below $ 7.20. If the stock cannot maintain the support level, it has the possibility of falling back to $ 6.49.
Benessere Capital Acquisition Corp (NASDAQ: BENER) gained 56.79% last week and on Monday the stock was trading up 7%, trying to break through a resistance level at 47 cents.
Benessere made all of his gains on Thursday of last week and on Friday printed a bullish inside bar pattern on the daily chart. Monday’s move is likely the bullish reaction to the pattern. Like Waitr, Benessere’s red flag is the gap left below between the 27-cent and 29-cent range.
- Bulls want to see a sideways consolidation above or slightly below the upper resistance level and then a large bullish volume comes in and pushes the stock towards the 50 cent mark. Above the level, there isn’t much resistance until the stock has hit an all-time high of 60 cents.
- The bears want to see the bearish volume drop Benessere below the 42 cent level. If the stock loses the support zone, it could go back to 37 cents.
Vinco Ventures. Inc (NASDAQ: BBIG) was the fifth best winner last week with an increase of 54.41%. On Monday, Vinco consolidated the move by trading sideways in Friday’s price range, which put the stock in a bullish inside bar setup.
Vinco can also set up a bullish flag pattern on the daily chart and has already developed the bullish four hour pattern. The pattern is developing just below a resistance level at $ 8.90 and if the pattern is recognized Vinco should be able to break through the level and take another higher resistance area at $ 10.
- The bulls want to see further sideways consolidation to keep the RSI below 70% and then for some big bullish volume to come in and push the stock up through resistance levels and up to the all-time high of $ 12.49.
- The bears want to see big bearish volume come in and push Vinco down below a support level at $ 7.40. Below the level, the stock has support at $ 6.68 and near the $ 6 mark.
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