👀 $ADBE: Covid Low Swept - Is a Reversal Building?
$ADBE has been one of those names quietly bleeding out while the broader market held up. From a software giant trading near $700 at its peak to now sitting around $264 -a 60%+ decline from all-time highs. Last week, something significant happened: price swept the Covid low liquidity level at $255.
For high-conviction swing traders, that’s a level worth paying attention to. But is this the beginning of a reversal, or is there more downside to come? Let’s break down the price action across timeframes.
In this post, you’ll get:
- Monthly and weekly timeframe analysis with market structure context
- Key levels for entry, invalidation, and targets
- My conviction verdict on $ADBE right now
Not Financial Advice
Monthly Timeframe
Since mid-2024, $ADBE has been in a clear bearish market structure on the monthly timeframe. Price has moved steadily lower with no confirmed bullish reversal pattern to date.
$ADBE - Monthly timeframe
However, the latest leg to the downside swept the Covid low liquidity -a significant level where price previously reversed with conviction back in 2020. Price has also taken the previous month’s liquidity, which is a prerequisite I like to see when waiting for a potential bullish reversal.
That said, there is still no confirmed bullish reversal on the monthly timeframe. The liquidity sweep is a necessary ingredient, but not sufficient on its own. We need to see structure shift before conviction increases.
Monthly conviction: No confirmed reversal. Covid low liquidity has been swept, and previous month’s liquidity has been taken -both signs I want to see before a reversal, but confirmation is still missing.
Weekly Timeframe
The weekly chart brings more clarity to what’s happening. As price has been moving down from all-time highs toward the Covid lows, there have been a few attempts at developing a bullish market structure reversal pattern on the weekly timeframe. All of them have failed.
$ADBE - Weekly timeframe
Most recently, price did build a reversal pattern, but it was ultimately invalidated. Bulls were trapped -and for full transparency, I also had a failed trade based on that trigger, which I shared live on X.
What I would like to see now is price building a new bullish reversal pattern on the weekly timeframe. Preferably by tapping into the weekly bullish support level just below the previous week’s low around $251. However, we don’t necessarily need to tap into that level. I’m good to go with a reversal confirmed by a market structure shift on the weekly timeframe, defined by a weekly open or candle close above $301.4.
Weekly conviction: Developing. Structure is still bearish. I need a weekly close above $301.4 to confirm a bullish reversal trigger.
Targets and Invalidation
Target levels still need more clarity -we first need a confirmed weekly bullish reversal pattern before defining precise Fibonacci-based targets.
However, framing from the monthly timeframe, if we have now made our lows and are building a market structure shift from this level, a greedy target would be the $474 level. This aligns with an untested monthly bearish resistance level and the -1 Fibonacci expansion.
$ADBE - Targets and invalidation, monthly
I would like to revisit the targets once we have more data from the developing price action.
Invalidation for an aggressive trade at these levels: a stop loss below $205, which aligns with the low of the 2018 bullish structure. However, if we are currently building a reversal pattern here, that thesis would be invalidated at $251.
Conviction Verdict
$ADBE Conviction: Developing
Monthly structure is bearish with no confirmed reversal, but the Covid low liquidity sweep and previous month’s liquidity taken are prerequisites for a potential shift. Weekly structure needs a close above $301.4 to confirm a bullish trigger. Targets to be revisited once structure develops further.
My Position
I’m currently not positioned in $ADBE at the time of publishing, but I’m keeping this ticker on my developing-to-trade watchlist. Any trade I take will be automatically shared on my X account.
Are you watching $ADBE at these levels? Do you think the Covid low sweep marks a turning point? Let me know on X or Substack.
More chart analyses and trade reviews can be found on my Substack and by following my journey on X for live updates.