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TERP at Critical Resistance

Terraform Power Inc. (TERP) has been bullish since mid-June. As we can see in the 4H chart, TERP has been in a descending triangle throughout the year until this latest rally broke above the consolidation pattern. However, this swing is now reaching another key resistance.

TERP 4H Chart 7/27

(click to enlarge)

Critical Resistance:
- The 4H chart shows that price has reached 13.45, which was the December 2015 high. 
- The resistance area goes from 13.45 up to 14.00. 
- Note a potential bearish divergence developing between price and the RSI. 

Potential Pullback; Trade Planning:
- If there is a pullback, I would look for support above 10.00. Perhaps, I would look for evidence of support within the 10-11 area. 
- A break below 9.00 should invalidate any bullish outlook, so a stop should be below 9.00. 
- Also, if the 4H RSI dips back below 40, we should consider the bullish momentum dead. 
- If price does hold above 10.00 and the RSI turns back up before breaking below 40, we should anticipate a bullish outlook. 

Bullish Continuation Scenario:
- In the above-noted bullish outlook, the 13.50-14.00 area will likely be broken. 
-  From the daily chart, we can see that the next key support/resistance pivot area is around 20.00. 
- Also note that the trend has been bearish before 2016, though we might consider this trend reversed by the end of the year. Still, there is some prevailing bearish bias we should respect. 
- Therefore, we should limit our bullish outlook to 20.00, which is a very aggressive outlook anyway - about a 50% gain from current price. 

TERP Daily Chart 7/27

(click to enlarge)