SmileDirectClub Stock Looks To Be Breaking Out Of A Long Downtrend

SmileDirectClub Inc. SDC shares are trading higher Friday, as popular subreddits like WallStreetBets take a hold of the stock. There looks to be no company-specific news to explain the jump in price.

SmileDirectClub is up 16% at $6.96 at publication time.

Related: SmileDirectClub Stock Tumbles After Q2 Earnings

SmileDirectClub Daily Chart Analysis

• The stock was falling for a time, but now looks to have broken out of pattern resistance and could start pushing higher in what technical traders call a falling wedge pattern.
• The price has been falling throughout the last year and getting condensed between narrowing highs and lows. The price was able to cross above pattern resistance and move higher.
• The stock trades above the 50-day moving average (green), but below the 200-day moving average (blue), indicating the stock could still be facing a period of consolidation despite the breakout.
• The 50-day moving average may hold as a place of support, while the 200-day moving average is somewhere the stock may find resistance.
• The Relative Strength Index (RSI) has been pushing higher the past few weeks and now sits at 64. This shows there has been an increase in the amount of buyers in the stock the past few weeks.

What’s Next For SmileDirectClub?

Bullish traders are looking to see the stock continue to breakout and push higher before the stock cools off. Bulls are then looking to see the stock consolidate for a time before possibly making a further bullish move.

Bearish traders are looking for the stock to fall back down to where it was trading inside the wedge pattern. Bears would like to see the stock fall below where pattern support was and make a further downward push.