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Berkshire Hathaway Inc. (BRK.A) made a new ~5 month High yesterday, spearheading the bullish reversal of high cap stocks at the moment. The price is above the 1D MA200 (orange trend-line) and well above the 1D MA100 (green trend-line) and 1D MA50 (blue trend-line), the latter two are about to make a Bullish Cross.<\/p>\n
This draws comparisons with the previous ‘Strong correction’ Phase, during the COVID outbreak in February – March 2020. As you see the stock dropped a little over -30%, with the 1D MA50\/100 Bearish Cross signaling the last flush, the 1D Death Cross signaling the Bottom and the 1D MA50\/100 Bullish Cross the confirmation of the new rally.<\/p>\n
This time during the 2022 correction phase, the stock dropped a little less than -30%, again the 1D MA50\/100 Bearish Cross signaled the last flush, the 1D Death Cross signaled the Bottom and the 1D MA50\/100 Bullish Cross is very close to take place. Will it confirm a new rally. That remains to be seen. What’s certain is the fact that this time, Berkshire is already above the 1D MA200, without having the 1D MA50\/100 Bullish Cross, but it is just below the 0.618 Fibonacci retracement level, which was also a Resistance before the Cross.<\/p>\n
We’ve plotted the 2020 correction and recovery phase on the 2022 price action (black line) and as you see, even though lengthened, it matches the trend almost perfectly. This points to a longer term recovery this time (reasonable in the absence of the 2020 trillions USD in rescue packages) but it does show an ATH test by Q3 2023.<\/p>\n
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