Fitbit (FIT) Stock Chart Analysis

This Fitbit (FIT) stock chart update will focus on its possible recent bottoming activity I noticed while watching its charts for a few days. This possible bottoming process comes after a long, protracted downtrend.

FIT's share price has been in the downtrend since not too long after its IPO in June 2015. Not long after its IPO, Fitbit's (FIT) share price reached its all-time high of $51.90.

Since FIT's all-time high, it has been a slow and steady downtrend. The downtrend has been nothing short of extremely painful if you have been long the stock. Last week, FIT's share price hit a low of $5.31 before reversing and developing into a Bullish Engulfing candlestick pattern.

A Bullish Engulfing candlestick pattern is a bullish reversal candlestick pattern, meaning that the downtrend that FIT's share price has been in may be close to over or possibly even over already.

FIT's share price may be setting up for a rebound trade. The rebound could almost double FIT's share price from its current levels. But this trade does not come without great fundamental risk. FIT is not consistently cash flow positive and if it needs to raise any additional capital, low share prices do not help any secondary offerings.

Let's take a look at that Bullish Engulfing candlestick pattern and any other indicators on FIT's charts.

FIT - Bottoming Process

This chart will look at the bottoming process that appears to be happening with Fitbit (FIT). I threw FIT out as a quick trading opportunity that I saw setting up in the Idea Chamber last week. This is a 2 year weekly candlestick chart that actually captures all of FIT's activity since its IPO.

A Bullish Engulfing candlestick pattern developed last week, but that candlestick pattern was not on buying volume that was heavier than the previous candlestick's volume. Since there is not a volume confirmation, it is best to then wait and see if FIT's share price makes a higher high or a lower low this week as compared to last week.

One very bullish indicator to me is that FIT's share price has reached its Golden Ratio for its longer-term and shorter-term downtrends. The black Fibonacci Extension Tool calculates the longer-term downside price targets while the red tool calculates its shorter-term downside price targets. The Golden Ratio, a common measurement area, for both the shorter and longer-term downtrends has been reached.

The MACD Histogram indicates that there has been accumulation of shares down at these price levels. A slow and steady rising MACD histogram like that indicates accumulation. But just because there is accumulation does not mean that………..

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