A positive earnings report has ignited a resurgence of interest in flooring producer Mohawk Industries. The shares have rocketed back up the rankings in the SIA S&P 500 Index Report over the last four days snapping out of a downtrend and soaring from deep in the red zone, where it spent the last six months, back up into the Green Favored Zone for the first time since June of 2021.
A major turnaround is underway in Mohawk Industries (MHK) shares. Since peaking nearly a year ago, the shares had been under distribution, falling from near $230.00 toward $120.00 where support finally emerged over the last couple of months. Last week, new investor interest arrived in a big way with the shares staging a breakaway gap upward on a spike in volume. Following a retest of $140.00 as new higher support, MHK has continued its upward course this week.
Initial resistance appears near $160.00, a notable support/resistance level, followed by the $175.00 to $180.00 area where a long-term downtrend line, previous resistance, a round number and a 50% retracement of the previous downtrend cluster together, and then the $200.00 round number on trend.
A downward trend in Mohawk Industries (MHK) bottomed out last month in a Bear Trap Reversal, where MHK broke down into a bearish double bottom by one row then quickly reversed back upward. The rebound has extended into May with the shares completing a bullish Double Top breakout that signaled the start of a new recovery trend, with a bullish High Pole now emerging as well.
Based on previous column highs and lows, and a horizontal count, upside resistance appears near $179.35 and #202.00, close to the $175.00 and $200.00 round numbers. Initial support appears near $141.40 based on a 3-box reversal.
With its SMAX score increasing to a bullish 6, MHK is exhibiting strength against the asset classes.
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