November 14 Chart of the Day - Tyson Foods
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Tyson Foods (TSN) reported its fiscal Q4 results on Monday. Its $13.3 billion revenue missed Wall Street's target of $13.7 billion, while its earnings per share of $0.37 beat expectations of $0.25. Shares closed 3% lower after the mixed results.
Trading below $46 earlier today the stock is well off its $100.72 all time high (ATH) set in mid 2022. Since then it's been constant selling pressure.
From a price action technical analysis perspective we can see on the monthly chart that price recently crossed a change control zone roughly between $55 - $60 (dark gray rectangle).
Change control zones are one of the five price action tools we teach when charting anything. By definition, they are an area that represents where neither the bulls nor bears are in charge. Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it. Or, price can trade aimlessly sideways within it. When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.
More recently, price has been heading down towards a trend line that started back in 2008. Of interest to note, along the trendline there's also significant support/resistance and a potential demand zone.
A demand zone is another one of the five price action tools we teach. It's a price area on a chart where there is a high demand for the underlying asset based on historical price action in and around the same area where buyers could be prepared to purchase at different levels within the zone. A demand zone is present within the light gray rectangle and has a high buying potential.
These areas and levels of interest create what's known as "confluence" on the chart. Much like when two rivers join to form one...
Additionally, we've set an alert to notify us if / when price reaches the long term trend line as it could also be in the demand zone as well as testing support/resistance.
It certainly is a "level of interest" for us and statistically speaking a "line in the sand" for bulls to defend.
For this chart we're not interested in going to a lower time frame view because currently the only level we're interested in is the long term trend line.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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