Check out this Cup & Handle on $FNKO – October 24, 2022
FNKO
This is Scott with your Chart of the Day. I want to take a look at Funko ( NASDAQ: FNKO ). I think it was a couple of months ago I was looking at Funko ( NASDAQ: FNKO ) noting how it had a pretty big cup and handle pattern going.
You can see this downward-sloping trendline that I drew back here in July and August. It ended up breaking out higher and got rejected just above the highs from back here in May and June of 2021. Now, if we zoom out even more and see how the chart played out, you can see it is actually turning into an even bigger handle. We have this massive multi-year cup and this clear handle down to the 200-day moving average, which is the blue line here.
Now, if I get rid of that line we can see we have clear support down here at the 200-day, which coincides with this clear breakout level. And then if I draw this downward-sloping trendline you can see how we have this clear resistance. The sellers are coming in here, here, and here, so we know exactly where the stock needs to get above in order to trigger a move out of this consolidation range.
I think it makes sense to have an alert on this stock right around that 22.70 level, maybe just right at 22.70. And then you will want to see a clear move above that level coming on volume. I am going to set my alert just a few pennies below 22.70. But I think a close above 22.70 is really what you want to see here.
I like that the stock has just kind of been going sideways. While the market has been making some lows and chopping around this has really kind of found support around this cluster of moving averages, this is what I want to see.
In a bad market, we want to pay attention to stocks that are holding in and around some key moving averages and are within a few percentage points of a clear pivot. I see a clear pivot right around that 22.70 level. We want to see Funko ( NASDAQ: FNKO ) get above, stay above, and do it on volume.
Now, I do want to point out that Funko ( NASDAQ: FNKO ) has earnings coming up on November 3rd. So we will want to see a positive move out of earnings. I probably wouldn’t buy this stock just before earnings because it’s a gamble. You never know what is going to happen and so I tend to not hold stocks into earnings unless I have a good cushion.
And if you are just buying this right here, right now and it doesn’t really kind of make a 20 percent move higher before earnings you probably don’t want to hold it into that report. Once again, I think that 22.70 level is pretty key here on Funko ( NASDAQ: FNKO ).
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