Adobe- Price Action Analysis

The giant computer software company Adobe has been making some big trend moves over the last couple of years and we have analysed the technicals below. 

The chart below is on the Monthly timeframe, this clearly shows Adobe in an uptrend for the last 5 years. In 2012 the Adobe stock was trading around $30 and in 2017 the price soared up by almost four time the amount to $119.

The trend continues to be linear, meaning there are not many pull backs which is exactly what we want to see as trend traders.

Now we have clearly identified the longterm trend on the Monthly chart lets take a look into the Weekly. 

We have added the 200 Simple Moving Averages on the Weekly chart and the price has been trading above this which confirms the uptrend. Similar to the monthly chart the trend is very linear, however there are some areas where price has pulled back that we may need to consider. 

At the bottom of the chart is the trading volumes, which simply shows how many people are trading this stock at the present moment. Points a, b and c are three areas where price has pulled back for a short period and continued in the direction of the overall trend. You may have noticed the volumes have increased each time price has pulled back. The reason being is because the buyers in the market believe the price is cheap and it is a reasonable time to buy. We need to consider the volumes before we enter a trade, as liquidity is key to trading.

The Daily chart below further strengthens the uptrend for Adobe. This stock is trading above the highest price of 2016 which was $111. We have also added a bullish trend line and price has has respected this on multiple occasions with regards to the indecision candles circled below.

Our technicals show this trend is going to continue and we do favour a further rise to the upside.

Always remember the best way to predict the future is to understand the past, and this is why we analyse historic charts to gain an advantage of what may happen next.

Happy Trading guys :-)