Take a look at the 1-year chart of Wolverine (NYSE: WWW) below with added notations:
WWW had been declining rapidly into the end of 2015, but in January the stock began to rally, and then moved into a sideways trading range. While in that sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
The WWW rectangle pattern has formed a resistance at $20 (red), and a $16.50 support (green). At some point the stock will have to break one of the two levels.
The Tale of the Tape: WWW is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $16.50 or on a breakout above $20. The ideal short opportunity would be on a break below $16.50.
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