Key Takeaways
- Mobileye shares fell 28% this week as investors were left unimpressed by the autonomous driving company’s presentation at the CES consumer electronics trade show in Las Vegas.
- 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 (MBLY) shares lost more than a quarter of their value this week as investors were left unimpressed by the autonomous driving company’s presentation at the CES consumer electronics trade show.
Bloomberg Intelligence analyst Jake Silverman pointed out that CEO Amnon Shashua’s address at the highly anticipated event in Las Vegas didn’t provide any updates on commercial wins, likely disappointing investors after the company unveiled promising driving assistance technology at its capital markets day in December.
The Israeli-based company’s stock lost more than half its value last year as its sales came under pressure from customers carrying too much inventory and a broader industry slowdown in China and Europe amid uncertainty surrounding global self-driving regulations.
Mobileye shares fell 7.7% to $15.65 on Friday, amid a broader downturn for U.S. stocks. The stock declined 28% over the week.
Below, we take a closer look at Mobileye’s chart and use technical analysis to identify important price levels worth watching out for.
Ascending Channel in Play
After bottoming out in mid-September, Mobileye shares have trended higher within an orderly ascending channel, a chart pattern comprising two parallel upward sloping trendlines.
However, more recently, the price ran into overhead resistance near the pattern’s upper trendline and the nearby 200-day moving average (MA). Moreover, Wednesday’s 13% sell-off occurred on the highest volume since early August last year.
It’s also worth noting the speed of the drop, with the relative strength index (RSI) falling from overbought conditions to below the 50 threshold in less than a week.
Let’s identify crucial support levels to watch if the stock remains in its longer-term downtrend and also point out a major overhead area worth monitoring upon a bullish reversal.
Crucial Support Levels to Watch
A convincing breakdown below the ascending channel’s lower trendline and 50-day MA could see the shares initially decline to around $15. This level on the chart may provide support near a horizontal line that connects the late August countertrend peak, the September peak and mid-November pullback low.
Selling below this level brings the $12 level into play, a location on the chart where the shares may encounter buying interest near a series of prices situated in close proximity to the mid-October trough.
Further downside could trigger a fall to the $10.50 level. Investors may look to scoop up shares in this area on the chart near the stock’s pronounced September swing low.
Major Overhead Area to Monitor
During a recovery in the stock’s price, investors should set an alert at the $24 level. Traders who have attempted to capitalize on the stock’s recent volatility may look for exit points near a confluence of resistance from the prominent February trough and the ascending channel’s upper trendline.
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Source: Mobileye Stock Price Levels to Watch After This Week's 28% Drop
