Quick Take Technical Analysis: Chewy, Inc

Chewy, Inc CHWY reached a high of $97.74 on Aug. 13 before entering into a steep downtrend, which was exacerbated by a bearish reaction to its second-quarter earnings print on Sept. 2. The stock then hit a bottom on Oct. 12 and bounced up, which indicated a trend change may be in the works.

• Chewy is now trading in a confirmed uptrend after printing an Oct. 20 high of $67, which was above the previous lower high of $66.52 made on Oct. 7.
• The stock may be settling into a bull flag pattern on the daily chart, with the pole created between Oct. 12 and Oct. 20 and the flag between Wednesday and Friday.
• If the bull flag pattern is recognized the measured move, calculated by determining the length of the pole, is about 10%, which indicates Chewy could trade up toward the $71 mark in the future.
• There is a gap above between $81.37 and $86.60, and because gaps fill about 90% of the time it is likely Chewy will trade up into the range in the future.
• Chewy must hold above the $61.90 level to maintain the uptrend.
• There is resistance above at $67.76 and $71.71 and support below at $63.87 and $60.45.