ThinkTechnical 9 July

Hang onto your handkerchiefs traders! 

Today's ThinkTechnical stocks are certainly in nose-bleed territory.

The buy now-pay later (BNPL) sector has been HOT, HOT, HOT lately, and you would have had to have been in total covid-19 lockdown with no contact from the outside world to have missed seeing their incredible gains. 

When a sector is this hot, investors have to balance the fear of getting in at the top, against the fear of missing out (FOMO). So, is it too late to get on board the BNPL train, or forget Gordon Gecko's "greed is good" mantra, update this to the 2020's and perhaps "FOMO is good"?

Let's have a look at the techincals, because unlike the hype, the chanters, and the nay-sayers, the technicals don't lie!

The last time we covered APT, it was 25 June and the price was around $56. We said to "look for price rallies from short term static support between the 10 June high of $54.85 and the 22 June low of $56.24". The price ended up bottoming out on 29 June at $55.30.

Today, APT is in well-defined short term uptrend as evidenced by correct order and rising 21-34 EMAs, and a well-defined long term uptrend as evidenced by correct order and rising 144-233 EMAs.

The static resistance at the 3 July high, and psychological $70 round number appear to dominate the recent price action. The price today is threatening to breach this level.

Static support will be encountered at the 8 July low at $65.31, and dynamic support from the short term moving averages is projected to lie between $60.00 - $63.50.

Lower down, further static support will also encountered at the 24 June high of $62.33.

Traders may wish to buy at the static and dynamic support zones with stops set below these levels. If this cannot be achieved, then traders will have to consider buying on a close above $70.

Beyond $70, there are no targets until potentially the $80 psychological static resistance level, and then to $100.

SZL is in well-defined short term uptrend as evidenced by correct order and rising 21-34 EMAs, and a well-defined long term uptrend as evidenced by correct order and rising 144-233 EMAs.

Note, because SZL is a relatively newly listed company, the long term moving averages have only just started to print.

Today, the SZL price is extending into static resistance from the psychological $6 round number barrier. This will likely impede progress in today's session at least.

Static support will be encountered at the 25 June high of $4.45, which also coincides with the 2 July high. When support or resistance zones coincide, expect a stronger corresponding response from the market at that level.

Below this, dynamic support is projected to lie between $4.10 - $4.50. Lower again, further static support will be encountered at the 19 June low of $3.68.

Traders may wish to buy at the static and dynamic support zones with stops set below these levels. If this cannot be achieved, then traders will have to consider buying on a move above today's high of $6.12.

Whilst targets are open-ended, given the significant distance from the current price to likely stops below the support zones, the reward-to-risk potential of a long trade is somewhat questionable.

Z1P is in well-defined short term uptrend as evidenced by correct order and rising 21-34 EMAs, and a well-defined long term uptrend as evidenced by correct order and rising 144-233 EMAs.

Recent price action shows that Z1P appears to still be dealing with the October 2019 high of $5.86. It pushed past this level with a first test on 3 June, and then a second test on 11 June which culminated in a high of $6.97.

Clearly supply caught up with the sharp price rises, and the price has been pressed back into a static support zone defined by the October high and the psychological $5 round number.

Importantly, dynamic support from the 21-34 EMAs held, culminating with the 29 June low of $5.03. The price is tentatively moving back to static resistance at the 11 June high of $6.97.

$5.03 is now static support, and closer, the dynamic support zone sits between $5.30 - $5.65.

Traders may wish to buy at the static and dynamic support zones with stops set below these levels. If this cannot be achieved, then traders will have to consider buying on a close above $6.97.

Beyond $6.97, there are no targets until potentially the $8 psychological static resistance level, and then to $10.