Check out this Bottom Fish on $ZIM – January 17, 2023
This is Scott with your Chart of the Day. I’m not sure if you caught it or now, but Dan Fitzpatrick from Stock Market Mentor, the founder of the website, was actually on Fox Business today, with Charles Payne. They were talking about the market, talking about the railroads, and talking about Homebuilders.
The guy who was on before Dan mentioned this stock, ( NYSE: ZIM ). I apologize, I don’t remember the gentleman’s name, but he was a lovely fellow. He had said that he likes ZIM Shipping ( NYSE: ZIM ). So I pulled up the chart as I was waiting for Dan to come on, and I thought, okay, a potential bottom fish opportunity.
Now, in 2022 this stock was actually a pretty good performer here. You can see how it chugged up nicely, and they even had some dividends as well. If I zoom out you can see it is kind of like a rainbow pattern, which I don’t know is an official pattern, but I’m naming it that because we have this huge runoff of the low. And then a massive move, and then it just kind of gave it all back, like most things in 2022.
But it has found a little base of consolidation over the past month and a half or so. We see this short base of consolidation, and a potential move to the 50-day moving average, if it can break out of this space. Now, here’s the thing, this stock has rallied to the 50-day before, only to get rejected. It got rejected way back here, you can see this wedge pattern I drew. A rally to the 50-day, and a big pullback. A rally to the 50-day, and a big pullback. Again, to the 50-day, where did it get rejected? Yes, the same story over and over.
If I was to look at this pattern here, what I would recommend is, probably having a stop loss kind of around this base, and a close below this level. You probably want to get out of the way because then it is coming down to test this low from December 19th. But if this can continue and possibly break out of this base I could definitely see it rallying about 15 percent higher to the 50-day moving average.
The only thing is, does it hold? And if it doesn’t, well, then I think you have got to get out of the way. So I would watch for a break out of this range, and then see how it reacts if it can get back to that 50-day moving average. If it does work in your favor I would probably want to move up a stop to break even as soon as possible. Then no matter what happens, you’re not taking any major losses, and that is really going to help your account, especially to kick off 2023.
So I would want to see kind of a bottom fish opportunity here. I wouldn’t want to see it break down below this base, and I would want to see it break up and ideally crest and hold above that 50-day moving average. But even if it does break up there and get to the 50-day, you will probably want to lock in some profits. And then, as I said, stagger some stops so no matter what happens you are not taking any big “Ls”.