ChargePoint Investors' Hidden Bullish Orders: I See You (Technical Analysis)

Sep. 02, 2022 2:13 PM ETChargePoint Holdings, Inc. (CHPT)
Justin Ward profile picture
Justin Ward
1.09K Followers

Summary

  • ChargePoint released Q2 earnings that beat expectations.
  • An initial reaction saw CHPT at $20.
  • It is the complex bullish wave pattern that we will be examining and looking to see if ChargePoint may have bottomed.

group of EV charging stations

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In this article, we will discuss the hidden attempt at finding bullish momentum for ChargePoint (NYSE:CHPT) by way of a complex macro three wave pattern that has developed for only the second time in this company's history. We will be looking to see has ChargePoint bottomed by this bullish attempt and examining where it might be going in the immediate future.

The company's revenue was up to $81 million from $56 million the same period last year, but the reception to ChargePoint's earnings report appears mixed. However, mixed or not, ChargePoint is technically turning around in a bullish direction and the world's leading electric vehicle charging network provider has broken into a three wave pattern which is due to land at $23, but it is the anticipation of the next macro monthly timeframe rejection that will let us know how far north ChargePoint can go in the immediate term should a rejection candle develop to allow a macro third wave to break out further.

Below is a snapshot line graph of ChargePoint's price action history since 2021 courtesy of Seeking Alpha. A second shot below shows the full price action timeline.

Charge Point

ChargePoint (Seeking Alpha)

Charge Point

ChargePoint (Seeking Alpha)

Opening in September 2019 circa $9, ChargePoint idled in that price region until September 2020 when it saw a wave of bullish action which topped out at the mid $17 area which included a rejection candle for the breakout wave upwards. As the stock rocketed out of the blocks in a huge third wave to top out $49 two months later, it was to be the last macro three wave pattern ChargePoint has seen until now.

Often bottoming foundation orders that attempt to carry a financial product higher are hidden by way of a complex identification of what exactly a three wave pattern filled with orders to drive a product higher actually is. Large orders generally will be massaged into a price range so that they can be filled without alarms that rocket the price before they can be filled by way of a wave pattern that may go unnoticed on a chart.

Charge Point

ChargePoint (Ovalx)

If we look at the monthly chart above we can identify a low and high with rejection followed by a break-out above the rejection confirming a complex pattern of waves one, two, and three. This three wave bullish pattern is the first since October 2020, and it's only second in the companies charting history. This all said, ChargePoint needs to firstly complete its third wave at $23 while also finding a rejection candle that will act as the macro wave two that would propel this stock higher again.

To look at this pattern in more detail we can move to the weekly chart which acts as a magnifier to the internal workings of this complex structure. We can see a clear three wave pattern by way of higher highs, which is more obvious than the monthly chart. In order for three wave patterns to form, they must go through the timeframes until they arrive at the monthly. It is then the continuation of monthly three wave patterns that carries a financial product significantly higher by making one after the other until exhaustion.

Below is the pattern in the weekly timeframe.

Charge Point

ChargePoint (Ovalx)

As the current monthly candle is in bearish formation at the time of writing, it may be that this candle turns around and moves up to hit the $23 mark this month. The other immediate scenario is this candle finishes in bearish formation to create the second rejection for the next third wave, although this option ideally is less favorable for a bullish set-up. If this stock goes below $8.50 the third wave would be rendered a fail. I would expect ChargePoint to hit its third wave target within the next 30-60 days if it is going to do so, and it is the rejection candle for a larger second three wave pattern that is anticipated to propel this stock higher.

Below we can see the overall current structure with breakout area and target.

Also included is Seeking Alpha's ratings link to this stock.

Charge Point

ChargePoint (Ovalx)

About the Three Wave Theory

The three wave theory was designed to be able to identify the exact probable price action of a financial instrument. A financial market cannot navigate its way significantly higher or lower without making waves. Waves are essentially a mismatch between buyers and sellers and print a picture of a probable direction and target for a financial instrument. When waves one and two have been formed, it is the point of higher high/lower low that gives the technical indication of the future direction. A wave one will continue from a low to a high point before it finds significant enough rejection to then form the wave two. When a third wave breaks into a higher high/lower low, the only probable numerical target bearing available on a financial chart is the equivalent of the wave one low to high point. It is highly probable that the wave three will look to numerically replicate wave one before it makes its future directional decision. It may continue past its third wave target, but it is only the wave one evidence that a price was able to continue before rejection that is available to look to as a probable target for a third wave.

This article was written by

Justin Ward profile picture
1.09K Followers
Justin Ward is a derivatives trader, wave theorist and the author of The Ward Three Wave Theory. Outling future market price movements using wave theory, Justin charts predictions for major Equities - Commodities and Indicies. You can find the link to the book below.https://www.barnesandnoble.com › t...The Ward Three Wave Theory by Justin Ward | NOOK Book (eBook)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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