ONTO Forms Deep Base with Faulty Setup; Uptrend Intact but Confirmation Needed

Posted on by Eben@CANSLIM Research
ONTO daily stock chart with 10, 20, 50, 150 and 200-day moving averages, volume and RS line versus SPY — CANSLIM Research

ONTO is holding a Stage 2 uptrend, trading at $351.16 with price above its rising 30-week moving average and 7 of 8 trend-template checks passing. However, the current base is a deep 42.3% correction over just 7 weeks, flagged as faulty with an elevated failure rate, and no VCP contraction sequence has formed. Sentiment is constructive but awaiting a breakout above the $378.45 pivot for confirmation.

As of 2026-08-17 · Close $351.16

Stage 2 (Advancing) — Price holding above a rising 30-week MA — uptrend intact (30-week MA 6-week slope: 7.79%)

⚠️ Faulty cup warning: the base is 42.3% deep (above the 38–40% threshold). A correction this deep leaves heavy overhead supply — trapped holders from higher prices are likely to sell into any rally, raising the failure rate of a breakout from this base.

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