Boston, MA 10/09/2013 (wallstreetpr) – Nokia Corporation (ADR) (NYSE:NOK) (Closed: $6.60, Down: 0.60%) spent another flat session on Tuesday flirting around the previous day’s closing price. It has been consolidating in the range of $6.45 – $6.75 for more than 3 weeks now. The price action produced a small bearish candle but that would not have any significance as long as the price remains stuck in the range. The volume at 30 million was well below the average volume of 42 million. This low volume is the true indicator of the inner workings of the range. A range at the higher levels with high volume signifies that distribution by smart money is going on. But a range like this with low volume shows that the big buyers are taking a break and big sellers are absent.
The stock had exploded to the upside after the news about the company making a deal worth $7 billion with Microsoft Corporation (NASDAQ: MSFT) came on the market a few weeks back. It has reached $6.78 from $3.90 in just 3 weeks after that news. A rally requires correction and a strong rally like that produces time correction more than the price correction. A break above $6.78 in the next few weeks would bring the next phase of the rally and would be the signal to play the breakout.
The price action from the 2012 top of $5.87 had created a huge Cup & Handle pattern. The pattern implication target of that at $8 has not been achieved yet but the next phase of the rally can do that. Investors could book some profit at $8 levels as that is the confluence zone of May 2011 gap upper boundary, the lower boundary of the historical supply zone of $8 – $12 and the 61.8% retracement level of the fall from the 2011 top of $11.75 to the 2012 bottom of $1.63.
