- Ondas Holdings is testing a key volume shelf at $2.61 for potential support.
- Technical analysis suggests a reversion toward $2.61 as the next critical move.
- A successful mean reversion move could trigger a rally toward $2.61.
The stock of Ondas Holdings (ONDS), having recently touched a critical volume shelf, is now in a position to confirm or disprove its upcoming price direction. The stock has been suffering downside pressure in the last 30 days, with a decrease of 19.28%, down to a price level of $0.8637. Technical analysis suggests the possibility of a mean reversion move toward the $2.61 level, coinciding with the February 2021 pivot VWAP.
Market analyst Jake Wu, who shared the chart above, also noted the important volume shelf around $2.61. Also, the February 2021 pivot point marks an important area of price action. This price zone has had relevance in the past, and the VWAP (volume-weighted average price) indicator shows strong support; thus, many in the market have been watching for signs of reversal or consolidation before any potential uptick.
Volume shelf suggests reversal scenario
Importantly, the volume shelf created at the price of $2.61 is an area of thick trading activity. As such, it is deemed to be acting as a support zone, which may afford a measure of cushion against further slide. Moreover, with the stock currently trading underneath this volume shelf, the likelihood of a rebound remains a point of concentration to many investors.
Also, the thick volume on the shelf implies that if the price is approaching this level, buying interest will increase. Traders and analysts expect this stock price to gravitate back toward the $2.61 mark. Still, the above actually hinges on many factors, including the general market state and investor attitude surrounding it.
Market Reaction and Investor Sentiment
The market itself has been turbulent for Ondas Holdings, with some of the most recent constraints pushing the stock down further. With patience stretched to the limits, downward price action has created doubts about the long-term outlook of many investors toward ONDS. Aiding the stock in stabilizing and dampening selling pressure toward a reversal is the recent buy rating issued by Lake Street on Monday.
Possibly technical indicators suggest a bullish move toward the reversal $2.61 under negative sentiment for the stock now. The mean reversion move could also serve as buying opportunities for investors who believe in the value of Ondas Holdings for the long term. For further directional clues, analysts will be watching price action around this key level.
The Technical Setup for Ondas Holdings
Currently, the technical setup for Ondas Holdings is at a crossroads. The impending volume shelf price action will dictate whether further consolidation is seen or the downtrend ceases and reverses. Many traders see this setup as an easy entry if stabilization is noted.
Besides, the interrelationship between the price level of $2.61 and the February 2021 pivot VWAP suggests that resistance may be hit around that price level. However, should this reversion be successful, an uptrend may ensue, whereby optimism returns to the stock. Traders will be closely watching volume and price action during the week for any developments.
