Technical Analysis on Sotera Health Co (SHC)

Wednesday, September 4th, 2024

In this Wicked Stocks video analysis, we examine Sotera Health Company (SHC), which is currently testing a key resistance level. If the stock fails to close above this level, it may see a pullback in the coming months. However, a weekly close above this resistance signals a potential buy opportunity, offering a strong upside over the next 2-3 months.

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Trade Plan for Sotera Health Company (SHC) - As of September 4th, 2024

Key Levels to Watch:

• Resistance Level: $15.38 (descending channel top)
• Buy Signal: $15.53 (1% above $15.38)- Friday September 6th
• Bearish Targets:
  • $12.64 (short-term downside target)
  • $12.34 (previous low)
  • $9.24 (longer-term downside target, conditional on breaking support)
• Bullish Target:
  • $19.02 to $19.40 (upside target range over the next 2-3 months)

Trade Strategy:

Bullish Setup:

• Scenario: If Sotera Health (SHC) closes above $15.38 by at least 1%: $15.53 for the week of Friday, September 6th, it signals a potential breakout, presenting a buying opportunity.
• Target: $19.02 to $19.40, a return to the highs from early 2023, which represents a potential 20% move over the next 2-3 months.

Buy Signal Confirmation:

• • A weekly close above $15.53 would confirm the breakout and set up a solid play to the upside.

Profit-Taking Strategy:

• • Consider taking profits around the $19 area. Given the stock’s history of volatile, quick moves, partial profit-taking at around $19 is recommended, with the possibility of holding a portion for further gains.

Bearish Setup:

• Scenario: If SHC fails to close above $15.38, it remains vulnerable to a pullback over the next 2-3 months.
• Bearish Targets:
  • $12.64: The 5/8 downside Fibonacci retracement, aligning with previous support levels.
  • $12.34: The October 2023 low, which could be revisited if bearish pressure continues.

Downside Potential:

• • A failure to break above $15.38 could lead to a 2-3 month decline toward the $12.34-$12.64 range, which would represent about a 20% drop from current levels.
  • If SHC continues to show weakness and closes below the $12.34 support level, the stock may decline further toward $9.24, though this would likely take an additional 2-3 months after breaking the $12.34-$12.64 range.

Risk Management:

• For Long Trades:
  • Place stop-losses below $15.38, around $15.20, to protect against a false breakout.
• For Short Trades:
  • If shorting near $19, place stop-losses slightly above the $19.40 level to guard against a continued breakout.

Summary:

• Bullish Bias: A close above $15.53 signals a buy opportunity, targeting the $19.02-$19.40 range over the next 2-3 months.
• Bearish Bias: Failure to close above $15.38 leaves SHC vulnerable to a decline into the $12.34-$12.64 area over the next 2-3 months.
• Longer-term Downside: If SHC breaks the $12.34-$12.64 support range, the next target would be $9.24, though this is likely a 5-8 month play.