Nokia Price Forecast: Breakout Signals Second Leg Higher

Key Points

• Higher swing low at $9.54 follows July’s $8.37 low and the 50-week average test.
• Tuesday breakout of the falling channel cleared $10.66 and reclaimed the 50-day average.
• Constructive volume hit a 13-day high above the 20-day average.
• Weekly hammer reversal triggered above $10.28, adding to the bullish evidence.
• Initial ABCD target is $12.30; 50% and 61.8% retracements sit at $12.91 and $13.98.

Market Analysis

Shares of Nokia Corporation (NOK) have shown signs of a continuing upward trend, establishing a higher swing low at $9.54, which follows a previous higher swing low at $8.37. This movement occurred after a successful test of support at the 50-week moving average. Following this, the stock reached a swing high of $11.13 three weeks ago, forming a small falling channel. A breakout from this channel occurred on Tuesday, confirming strength above the recent lower swing high of $10.66 and reclaiming the 50-day moving average.

Breakout Signals

The breakout from the falling channel indicates the potential for a second leg of the upward movement. The trading range on Tuesday was above the channel's upper boundary and the 20-day moving average, confirming bullish momentum. Volume on that day reached a 13-day high, surpassing the 20-day average, which further supports the bullish outlook.

Moving Averages and Market Sentiment

The reclaiming of the 50-day moving average signifies a shift in market sentiment, with buyers regaining control after a sharp decline to $8.37 in late July. Although the 200-day moving average was briefly lost as support, it was quickly reclaimed and confirmed multiple times. The recent higher swing low of $9.54 serves as a clear test of this support level.

Technical Indicators

A bullish reversal pattern, known as a hammer candlestick, was observed on the weekly chart, triggered by a move above $10.28. This pattern adds to the technical evidence suggesting that NOK may continue to rise.

Price Targets

According to Fibonacci retracement levels, the 50% retracement of the previous decline is at $12.91, while the 61.8% retracement is at $13.98. Additionally, an ABCD pattern indicates an initial target of $12.30, which reflects symmetry in price movements from the July low to the recent breakout. These targets provide defined levels for potential upward movement if the second leg of the advance holds.