Revolve will establish new channel

Revolve has had a rocky time since its IPO, with lots of volatility and several breaks below critical trend lines. However, this company is profitable, undervalued, and highly rated, and in my opinion it's still a great value.

With Revolve having breached the bottom of its parallel channel today, it's likely to establish a new channel. I've drawn a couple possible channels and some trend lines, and I've marked the breakout zones with the play for each zone. I've also marked support and resistance from all-time highs, and you can also see the high-volume support node at 35.27.

Currently I'm playing this long on the basis of that volume support node.

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There's also support at 30.65.

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Amidst this morning's broad market selloff, Revolve plunged right through the high-volume support node in premarket and the trend line support in the first half hour of trading. It's pulled back up to the trend line, but that may be temporary. Look for a buy point near channel bottom (say, 32.50), and keep that stop loss tight below the channel (say, 32.25)!

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May get a bit of a mid-day rebound from previous lows at 33.40, especially with the stock at nice, round oversold numbers at -1 on the MACD and -20 on the RSI.

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We did get a rebound, and Revolve is trying to move back above the blue trendline. However, I am *not* loving the bearish divergence it just formed on the MACD and RSI.

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Revolve is so far holding this red trend line. I have an alert set for any upward break of the blue trend line, and that will be my entry.

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Some bullish divergence on hourly MACD.