Breakout Faces Key Resistance
Nokia Corporation (NOK) stock broke out of a cup with handle basing pattern last week and appears poised to trend higher. A new trend high of $8.82 was reached on Monday, challenging resistance near a swing high from September 2014, which was at $8.73. The bullish continuation breakout signal did not confirm, however, with a daily close above that level. A daily close above $8.73 is needed next to confirm that buyers remain in charge.
Support Levels Define Bull Trend
A daily close above $8.73 would confirm a continuation of the bull trend originating from a 2012 trend low at $1.63. The cup with handle base breakout extended the bull trend from the 2023 low of $2.94. Key dynamic support for that trend is at the 100-day moving average, which has converged with an uptrend line in November. However, the 20-day at $7.90 and rising has defined dynamic support since it was reclaimed at the beginning of February, and it was successfully tested several times during the advance, further confirming it as a valid trend indicator.
Then there are the two more recent highs, at $8.37 and $8.19, respectively. Each is an area where support may be seen on a pullback, with the 20-day average being key. If the 20-day fails, the 50-day average at $7.19 becomes the next lower target.
Upside Targets and Fibonacci Levels
If a daily close above $8.73 occurs, a long-term bullish trend continuation signal will be realized. The next upside target from the price structure would then be around a range from approximately $10.51 to $11.75, consisting of prior support from July 2002 and a lower swing high from February 2011, respectively. Also, within that range is the 23.6% Fibonacci retracement of a long-term internal downtrend at $11.21.
Short-Term Setup and Next Steps
In the short-term, a cup with handle breakout recently occurred, and a new setup needs to be established. The first pullback following that breakout has not yet happened, and it should result in a new setup for a bullish continuation. This setup is a key dynamic to watch, as NOK has shown strength through a breakout of a near-term continuation pattern, aligning with the trigger for a long-term continuation signal.
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