Shares of Nokia ( NOK) got an analyst upgrade to "buy" from "neutral" from a major sell-side firm Tuesday but this shift may be early and not enough to shift the actions of investors and traders.
Let's check the charts.
In the daily bar chart of NOK, below, we can see that the shares have found some buying interest (support) in the $4.75-$4.50 area. The past four months look like a descending triangle formation. A descending triangle formation is a continuation pattern with lower highs and equal lows until there is a downside breakout. NOK is trading below the declining 50-day moving average line and below the declining 200-day line.
The On-Balance-Volume (OBV) line can be a leading indicator at times and this appears to be one of those times with the OBV line making new lows for the move down. The 12-day momentum study shows higher lows from March but this bullish divergence may not be enough to reverse the trend.
In the weekly Japanese candlestick chart of NOK, below, we can see that the shares have been drifting lower for the past seven months. NOK trades below the declining 40-week moving average line.
The weekly OBV line is pointed down. The 12-week momentum study is not showing us enough of a divergence to suggest we have established a bottom.
In this daily Point and Figure chart of NOK, below, we can see that the shares reached a downside price target in the $5.00 area. Reaching a downside price target is not a reason to become a buyer.
In this weekly Point and Figure chart of NOK, below, we can again see that prices reached a downside target. Again, this is not a reason to become a buyer.
Bottom-line strategy: The fundamental story for NOK may be improving but it has not (yet) become visible on the charts. Avoid the long side of NOK for now.
