With the stock pp more than 11% so far on Thursday, he’s not wrong.
AMC Entertainment (AMC) - Get Report and GameStop (GME) - Get Report have been garnering more attention lately, as these prior Reddit short-squeeze stocks begin to gain momentum. Well, at least some traders have been throwing Beyond Meat on that list too.
Shares are ripping higher on Thursday, rallying on news of its new product introduction in Canada.
The stock has rallied each day this week, now up four days in a row and more than 30% so far this week. It all started with a double upgrade from Bernstein analysts on Monday. Since then, it’s been on fire.
That comes after Beyond Meat fell to one-year lows after disappointing earnings earlier this month.
Does this week’s rally prove that Beyond Meat is back or will the rally soon fizzle out? Let’s look.
Trading Beyond Meat
The $120 to $125 area was resistance in the first quarter of 2020, then shares of Beyond Meat were hammered during the COVID-19 selloff. That’s no surprise.
However, shares were able to eventually break out over this prior resistance zone, which then became support. It’s very constructive to see prior resistance become support.
On the flip side, it’s quite bearish to see prior support become resistance. That was the major risk this month as Beyond Meat stock broke below $120 support, ultimately falling to about $100.
After finding its footing near $100, shares quickly rallied back toward prior support. On Monday and Tuesday of this week, the stock struggled with this area. On Wednesday it pushed through it and then shares exploded higher on Thursday.
With Thursday’s big rally, Beyond Meat stock is running into the 21-week, 50-week and 200-day moving averages. So far, the stock is pulling back from this area.
What do we want to see now?
On the upside, bulls want to see if Beyond Meat stock can push through these key moving averages. If it can, $150 is up next, followed by a possible push into the $175 area. Near the latter is the 61.8% retracement of the current range.
If shares continue to pull back, bulls really want to see the 10-week and 50-day moving averages act as support, along with the $120 to $125 area. If it’s support, that will likely be a dip to buy. If it fails, it’s possible we get a gap-fill down toward $110.