Battery Maker Enovix Could Soon Be Charged Up to Rally Further

The stock has been impressive but gains from here may be harder to achieve.
Stocks quotes in this article: ENVX

Lithium-ion battery maker Enovix Corp (ENVX) has rallied the past two months. Does it have more of a charge to keep going? Or will the advance stall? Let's check out the charts and indicators.

In this daily bar chart of ENVX, below, I see an improving technical picture. Prices topped out in August/September in the $26 area and declined to the $8 area in January. ENVX has rallied above the 50-day moving average line and the slope of the line is now positive. Prices are testing the bottoming 200-day moving average line.

Trading volume does not look like it is increasing much but the On-Balance-Volume (OBV) line shows an increase the past three months and suggests that buyers of ENVX are being more aggressive than sellers.

The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line for a buy signal but the two moving averages that make up this indicator have narrowed significantly. We need to watch for a potential take profit sell signal. 

 
 
In this weekly Japanese candlestick chart of ENVX, below, I see a mixed picture. Prices have recovered in recent weeks but there are two resistance areas to watch. The 40-week moving average line could provide some resistance and the middle of the large red candle in October could act as resistance.
 
The weekly OBV line is strong and that is a positive. The MACD oscillator only shows us a cover shorts buy signal. 
 
 
 
In this daily Point and Figure chart of ENVX, below, I can see a potential upside price target in the $27 area. Possible, but there is overhead chart resistance. 
 
 
 
In this weekly Point and Figure chart of ENVX, below, I can see the same price target as the daily chart above. 
 
Bottom line strategy: ENVX has nearly doubled in the past two months. Impressive but gains from here could be harder to achieve. 
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TAGS: Investing | Markets | Stocks | Technical Analysis | Automobile Components | Renewable energy | Electric Vehicles

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