Nokia as an investment (Part 4)

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You didn’t ask me, but here is what CoPilot said:

Copilot said:

That TA (technical analysis) comment basically means this:

What is shown in the image?

Nokia’s ADR (USD) has been in a downward channel since the summer:

  • The red downward trend line acts as resistance.
  • The green downward channel shows the main downward trend.
  • The price bottomed out at around 9.5 USD and bounced from there.
  • Now the price has risen back to the 10.7-10.8 USD range.

Why is 11 USD particularly important?

The author’s premise in the image seems to be:

  • Around the 10.8-11.0 USD level, several resistance factors converge simultaneously:
    • An old gap area (“Overnight GAP”)
    • The upper edge of the cloud (Ichimoku, etc.)
    • Multiple moving averages
    • A previous support level that has turned into resistance

In other words, there are many sellers around the 11-dollar mark.

Since Nokia could not continue its rise through this area, its momentum faded faster than that of many other AI/network stocks.

What does the commenter mean by “the last places to keep the stock in a longer downtrend”?

In my opinion, this is the most important point.

The TA perspective is:

If 11 USD rejects the price now, the downtrend remains in effect.

But if:

  • 11 USD is broken
  • The gap is filled
  • The price closes for several days above the resistance levels

…then the entire summer downtrend begins to break.

At that point, many short sellers will be forced to buy back, and trend followers will move to the buy side.

What does the RSI support?

At the bottom of the image, the RSI is around 54.

It tells us:

  • It is no longer oversold.
  • There is still room for growth.
  • But there is no strong overbought upward momentum either.

Thus, the RSI does not yet confirm a clear breakout.

My own interpretation (still CoPilot :stuck_out_tongue: )

If we think about Nokia through its fundamentals:

  • Q1 + Q2 AIDC orders were very strong.
  • The market is expecting more hyperscaler news from Q3.
  • The price has risen rapidly from the lows.

Technically, we are currently in an area where:

10.7-11.0 USD = a decisive battle zone.

  • Rejection → potential return to the 10.2-10.0 USD area.
  • Breakout → the next resistance levels start to be closer to 12-13 USD.

That is why the author says this is one of the last places where the bears can still keep the summer downtrend alive. If the stock can convincingly get above 11 USD, the entire pattern becomes significantly more bullish. :fire:

And if I reflect this on what we have previously discussed about the Nokia/AIDC case, the fundamentals currently look stronger than the TA. That is why the market is now watching very closely to see if there will be new hyperscaler orders in Q3 that would provide a reason to break through that 11 USD technical resistance.

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