Clover Health Sees A Breakout Above Resistance: What's Next?

Clover Health Investments Corp. CLOV shares are trading higher Tuesday. The stock remains a popular name in the Reddit community next to other names such as AMC Entertainment Holdings AMC and Gamestop Corp. GME.

Clover Health closed up 22.12% at $10.80.

Clover Health Daily Chart Analysis

• Shares made a large move Tuesday and have broken above the previous resistance level in what technical traders call a sideways channel.
• The $10 was holding as resistance in the past, but as the stock broke above the area it may now hold as a possible area of support. The $7 level may hold as support if the $10 level is unable to hold.
• The stock is trading above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the sentiment in the stock has been bullish.
• Each of these moving averages may hold as a possible area of support in the future.
• The Relative Strength Index (RSI) has been moving higher in the past couple of weeks and now sits at 69. This borders the oversold area meaning the stock has been seeing a lot of buying pressure lately.

What’s Next For Clover Health?

Bullish traders would like to see the stock continue to break out for a time before it cools off. When the stock cools off bulls would like to see the stock be able to hold above the $10 level before possibly seeing a break above resistance.

Bears would like to see the stock start cooling off immediately and start falling. Bears want to see the stock drop below the $10 level and head towards the $7 level. Bears eventually would like to see the stock drop below the $7 level and continue to push lower.