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Diginex Ltd (NASDAQ:DGNX) is moving higher on Tuesday. The company announced it has formed a strategic alliance with Evident Group. This will help meet the growing demand for sustainability data and tokenized assets.
After some recent selling, this news could be the catalyst for a reversal and move higher. This is why Diginex is the Stock of the Day.
• DGNX shares are climbing. Find out why here.
In the stock market, certain price levels have more importance than others. Successful traders can recognize these levels.
As you can see on the chart, $13.50 has been important for this stock.
In late September, it was a support level. Some of the people who sold their shares at this support regretted doing so when the stock reversed and moved higher.
Some vowed to buy their shares back if they could get them at the same price they were sold for. As a result, when Diginex returned to this level in late October, they placed buy orders.
There were so many of these orders that it created support at the price again.
When this support broke last week, many of the people who bought shares at the support came to regret doing so when their positions became losers. Some of them vowed to get out, but only if they could do so at breakeven.
So yesterday, when the stock returned to this price, these unhappy buyers placed sell orders. This created resistance and Diginex closed right at it.
Now this resistance has been broken. This means the traders and investors who created the resistance are gone. The news turned the tide.
Now the stage may be set for a move higher.
With the sellers gone, new buyers will need to cut ahead of each other and outbid each other to draw sellers back into the markets. This could push Diginex higher.
A reversal may have started.
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Photo: T. Schneider via Shutterstock
Posted In: DGNX
