Technical outlook – Approaching this share from a technical perspective, we can assess back in March 2020, Ecofibre Limited (EOF) established a potential base from the $1.20-30 region.
Due to the bullish divergence given from the Relative Strength Index (RSI) 3-day lookback now puts this share in a ‘bullish’ position, along with the support from the Moving Average Convergence Divergence (MACD) to strengthen the upward bias.
Traders can take advantage of divergence by using a variety of trend-based strategies.
Divergence is probably one of my favourite trading signals because they are dynamic and most often offer a reliable, high-quality trading signal reversal when combined with other trading tools and concepts.
In technical analysis, divergence can be a significant warning signal that a bullish or bearish trend is coming near to an end.
Divergence appears when a technical indicator (oscillator) begins to establish a trend that disagrees with the actual price movement.
These “disagreements” are strong signals and somewhat useful for the trader/investor.
The given analysis, the immediate target is located at $2.40, with scope to challenge $2.70. Reassess from there.
Company Overview – Ecofibre Limited (EOF) is focused on selectively owning or controlling specific parts of the hemp value chain, in targeted geographies.
EOF sells hemp-based products to consumers, wholesalers and manufacturers.
EOF holds diverse collections of genetics with over 300 landraces of cannabis from over 25 countries.