CGX (Cineplex Inc.) - Potential Pullback After Breaking Trendlin

Dec 16, 2024

On the 4-hour timeframe, CGX has recently broken below a key trendline that originated in late November, signaling potential weakness ahead. Here’s the detailed analysis:

1. Overbought Conditions: The RSI has climbed above 80, indicating overbought levels that often precede price corrections. This aligns with a bearish divergence seen in the MACD, which is starting to curve downward.

2. Support Target: If the pullback continues, I anticipate a move down to around $11.20, a level that aligns with prior support and Fibonacci retracement zones. This area could serve as a critical level to watch for potential reversal or consolidation.

3. Bearish Momentum: Moving averages on this timeframe are beginning to reflect weakening momentum, though the broader trend on the daily chart remains bullish.

Key Levels to Watch:
• Resistance: $12.00 (a failure to break below this might attract buyers early).
• Support: $11.20 (critical for confirming the pullback and setting the stage for a potential rebound).

Risk Factors:

While the technicals lean bearish short-term, a return of strong buying pressure or broader market positivity could invalidate the correction and see CGX resume its upward trajectory.

Let me know your thoughts—does $11.20 align with your analysis, or are you watching other levels?

3 days ago

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Update on CGX – Bearish Trend Continues with Oversold RSI
As of January 17, 2025, CGX has continued its downward movement, now trading below the $11.07 level. The steep decline, which began on January 9, is reflected in both price action and momentum indicators on the 4-hour chart. Here’s the current analysis:
1. Trendline Breakdown: CGX broke below its key support trendline from late November, confirming a bearish continuation pattern. This break aligns with increased selling pressure.
2. Oversold RSI: Unlike the December setup, the RSI now indicates oversold conditions, hovering near 30. This suggests that while bearish momentum is strong, a potential rebound or consolidation could be on the horizon.
3. Support Zones:
• The next critical support is seen around $10.80, a level that aligns with longer-term Fibonacci retracements and historical price activity.
• If this level breaks, the stock could see further downside toward $10.40.
4. MACD Divergence: While MACD remains bearish, we are beginning to observe a possible convergence of the MACD line and signal line, indicating that selling momentum may be waning.

Key Levels to Watch:
• Resistance: $11.20 and $11.60 (these levels now act as near-term resistance and will test any recovery attempts).
• Support: $10.80 (a failure to hold this level could signal further weakness).

Outlook & Risks:
With the RSI nearing oversold levels, we may soon see a short-term rebound. However, unless the price recovers and sustains above $11.20, the bearish sentiment could persist. Monitor volume and broader market trends for clues on whether CGX can regain its footing.

Let me know your thoughts—are you considering a potential bounce from oversold conditions, or are you targeting further downside for now?