MITL Stock: Indications Support Higher Prices
The current market environment is treacherous, and as long as volatility remains elevated, this market is best suited for those who are inclined to short, because elevated levels of volatility are conducive to markets geared toward lower stock prices. This is obviously a broad generalization because, even in a bear market, there is a bull market somewhere.
One aspect of this market that has made my life a tad bit easier is that it is currently easier to spot bullish investments that are geared for higher stock prices. The reason for this is quite simple; there are only a handful of stocks staging an advance on any given day, which narrows the prospects significantly.
I am focusing on Mitel Networks Corp (NASDAQ:MITL) stock because, in this current treacherous market, I believe that Mitel Networks stock is one of those investments that is currently geared toward higher prices. My beliefs are based upon a number of technical indications, which have been generated using the MITL stock chart.
The first indication is quite simple, and it outlines the bullish trend that is currently in development.
Chart courtesy of StockCharts.com
The simple indicator highlighted on the MITL stock chart is an uptrend line.
This uptrend line was created by connecting a series of higher lows. These higher lows are a part of the quintessential characteristic that defines all bullish trends, which is a staircase sequence characterized by series of higher lows and higher highs.
The uptrend line is a level of price support that also acts as a dividing line. As long as Mitel Networks stock is trading above this uptrend line, I can only assume that a bull market is still in development and that higher MITL stock prices will therefore prevail over time.
This notion of higher MITL stock prices is being reinforced by constructive price action, which is in development above the uptrend line.
The constructive price action I am referring to is highlighted on the following Mitel Networks stock chart.
Chart courtesy of StockCharts.com
This MITL stock chart highlights the constructive price action that has been responsible for creating and sustaining the bullish trend currently in development above the uptrend line.
Constructive price action consists of impulse waves and consolidation waves.
The waves highlighted in green are impulse waves, and they are advancing in nature. Impulse waves capture the stage in a bullish trend when a stock makes a sustained move toward higher prices.
The wave highlighted in purple is a consolidation wave, which is corrective in nature. Consolidation waves capture the stage in a bullish trend when a stock corrects and refrains from advancing. These waves are very pertinent in the development of a bullish trend because they lay down the groundwork so an advancing impulse wave can follow.
The consolidation wave, which was in development for three years, was finally completed in July 2017 when MITL stock exited the pattern that defined this wave. This bullish event implied that an advancing impulse wave was now in development, which, of course, suggested that higher Mitel Networks stock prices were on the horizon.
This notion of higher MITL stock prices is also being supported by the moving average convergence/divergence (MACD) indicator.
MACD is a very influential momentum indicator that distinguishes whether bullish or bearish momentum is influencing the price action in a stock. Bullish momentum implies that a stock is geared toward higher prices, while bearish momentum implies that a stock is geared toward lower prices.
Momentum is a powerful force, and a stock cannot sustain a move in either direction unless the applicable momentum is supporting it. The MACD signals that were generated on the Mitel Networks stock chart are a testament to this notion.
In January 2015, a bearish MACD cross correctly suggested that the advance toward higher prices had concluded and that lower prices were likely to prevail. This coincided nicely with the development of a consolidation wave.
In May 2017, a bullish MACD cross was generated, suggesting that the move toward lower prices captured by the consolidation wave had concluded and that higher prices via an impulse wave were likely to follow.
The MACD indicator is still in bullish alignment, and as long as it stays that way, it will support the notion that an impulse wave is currently in development, which opens the door for higher MITL stock prices.
I am currently holding a bullish view on Mitel Networks stock because a number of technical indications are suggesting that holding such a view is warranted. When new pertinent technical indications are generated, I will adjust my view on MITL stock accordingly.