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Cathie Wood's Ark just bought $16 million worth of Rocket Lab stock after a brutal two months for the stock price. The price fell steadily during June and then July to this key level. $61.86 and has since rebounded. On the daily chart, we have seen an upward impulse entering the market. Therefore, investors are rightly asking: Is this a turning point for the stock?
Will the price attempt to reach this all-time high again? Or is the price simply seeking liquidity before we continue selling? Now, I've marked some areas here on the chart and I want to tell you specifically why these areas are interesting. Because at CandleRange, which automatically tracks more than 3,800 NYSE-listed stocks, we have bullish setups, monthly, quarterly, and semi-annual bullish structures .
So I want to explain exactly what that means, how to identify it on the chart, and what it might mean for the stock price in the future. But remember, this is not financial advice. So, let's begin. What am I seeing here? This is the two-day chart. Now , I could be looking at the daily paper, the two-day paper, the weekly paper, it doesn't really matter.
What matters is understanding the price in the context of higher timeframes, because that context gives us everything we need to understand what the price will do next. And that's exactly what CandleRange tracks. So, let's begin. So, what are we seeing here? This is an enlarged view of the price. Now, until I make decisions or even analyze the price in this timeframe, I need to understand the price in the context of those higher timeframes.
So, I want to incorporate the six-month range. This is interesting for two reasons. First of all, what do we get at this specific point? We obtain the closure of a higher timeframe range of six months. So, we're looking at the price, but we can see the highest point, sorry, the highest and lowest point at which the price traded in the last 6 months.
And this 6- month candle closed at the end of June. And what did this 6-month candle do in relation to its predecessor? It surpassed this level, the maximum of the previous range, which was $79.83. And he posed a very simple question. Is there enough selling pressure in the market at this level to maintain the lower price?
And the answer to that question was no. The price reacted, but then rose further. And it closed here, at $101.64. So, at least within a 6-month timeframe, what do we have here that gives us any indication that the price is really going to reverse? Nothing. The price continued to rise. It did not react to the liquidity of the external range, nor to the selling pressure or the market supply at this level.
It kept going up. Yes, it has opened this new range which extends until the end of this year. But there is nothing in this timeframe to suggest that the price is about to reverse. Therefore, the target in the 6-month timeframe, according to the candlestick range, is this one here. It's the 6- month goal.
Because continuation ranges , continuation ranges of larger timeframes, almost always want to continue . They want to continue towards liquidity in the outer range or liquidity that sits at the limit of the larger time frame of the previous range. So this becomes our 6- month goal. And this becomes our 6-month invalidation level.
Why is it a level of invalidation? It's an invalidation level because this candle broke upwards. It continued to rise, so we expect the price to continue rising before falling. But, of course, it is not enough to look at just one larger time frame range. What we need to do is understand how the ranges are nested within those initial macro ranges.
So what I'm going to do is quickly mark the end of that 6-month range here . And I want to add the 3-month range. And naturally, what we see is that two 3-month ranges nest together to form a larger 6-month timeframe range . So if we remove the 6-month one, what do we see? We see that the price built a range.
This range, which has just been closed , literally closed here at the end of October. In this range, what did the price do? He tested the minimum of the previous range, which was the level I marked at the beginning of the video. This level here, $62.23. The price hit this level and has bounced back.
It has bounced and closed here. So what this tells us is that the price is testing a level of demand. Is there enough demand at $62.23 to keep the price rising? The answer to that question was yes, there is. So what we get is a 6-month invalidity level that is now protected by a 3-month invalidity level, and that level sits here, just above it.
It is the minimum of the range that tested the previous range. The price broke down, entered this demand test, and market demand intervened and pushed the price back to the previous range. So if the price has already tested this level, what reason is there to try to reach it again? There is no reason.
Therefore, this becomes our level of invalidation. And what we wonder then is if the price isn't going to go down any further, it will look for liquidity elsewhere. And where, where will it look for liquidity? It will seek liquidity at this level, the high of the candle that just closed, but ultimately at the opposite end of the range, which coincides here with the 6-month target.
So this isn't just a 6- month target, it's a 3- and 6-month target for the price at this point. If we go back to the candlestick range, it's $151. The candlestick range simply follows the exact same structure that we are analyzing. So, what we see here is that we have RKLB, Rocket Lab. In the 3- month timeframe, we have what we call an AMD.
This is manipulation. This is exactly what we are seeing. A candle that manipulated the previous candle. The price target is then the opposite end of the range. This is within a 6-month continuation candlestick pattern. The 6-month continuation candlestick is what we just analyzed. So, this is exactly what we are told, and we can begin to verify it in the graph.
And what they also see here is that we have monthly manipulation. So we can simply continue working with the ranges. So, let's bring in the monthly range. What we have here is that the price has formed this range. We can see it. The price broke above the low of that range and closed within it. So, the monthly target for the price, following the same logic, is here.
This is our monthly target, because that's exactly how the price moves. Create ranges, test those ranges, close within the range, or break down. If we close within the range, the price is reacting to demand at this low. Therefore, if the price has already passed that test, it no longer needs to return to this invalidation level.
He wants to seek liquidity either at this level or at the opposite end of the range, which gives us our monthly target. So, what we have now are stacked targets. We have the monthly, quarterly and semi-annual, all aligned in an upward direction. So, let's go back to what we initially observed when we opened this video, which were those weekly levels.
Now, in the weekly chart, if I only bring this in, what do we see? We need to zoom in on the image for this. We obtain a weekly structure. So, the price ... Actually, what I'll do is show the weekly chart because this will look much simpler. So we get the weekly structure formation. The price, if I remove this level, is bearish at this point.
We are experiencing buying pressure in the market. Then, the price is sold. So what do we get? We obtain a block of orders in the weekly timeframe located here. This is the weekly order block. The price is trending upwards , but of course, it wants to test this level next. So it's being aggressively marketed towards this level.
And what we get then is a weekly change. The price is driven by selling pressure before we can buy, creating an imbalance. This is a sale to buy. Therefore, this becomes a weekly order block . And what we also get is the formation of an imbalance in the price located here between candle one and candle three.
The price moved so aggressively in this candlestick; this is bullish volume entering the market, which left a price imbalance right here, which is our structure. So, we now have two levels of support on the weekly timeframe. This is the order block located here between 6770 and 6153. We also have an imbalance located between 6940 and 6864.
So, if you are bullish on this market, I will bring back the 3-month range we were analyzing. This is the structure you potentially want to use to measure that rebound. The price seeks to test these inefficiencies and then look to respect these invalidation levels. These are natural points at which you can exit any position if the price falls below these levels.
But ultimately, the target is accumulated over the monthly, quarterly, and semi-annual periods, and this could be the beginning of that next rise. Now, the only thing to keep in mind from a bearish perspective here is that if we bring back the 6- month chart, what we also have at these lows is an imbalance between the candle here, bullish candle, bullish candle, bullish candle.
So, the imbalance between candle one and candle three is here on the 6-month chart. Therefore, the price can use the 3-month structure, build a range, manipulate the range, and now aggressively target the opposite end of the range to move higher. Or perhaps it wants to seek liquidity in this imbalance before reaffirming its bullish structure to target higher prices.
But ultimately, the structure here is incredibly bullish. So, if you're optimistic about this market, you have everything you need to start looking for entry points into long positions. But of course, this is not financial advice. And if you want to find every stock on the stock market that has an upward trend, sign up for CandleRange, because you can access CandleRange.
You can simply configure the cascade or action cascade as you see fit, from a daily structure to a 12- month structure, and you'll see which actions are ready to move. So please go and get started there for free. If you like this content, subscribe to the channel and we'll see you in the next video.
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