Channel Breakouts
As an
intermediate term trader, patience is required for stocks to set up.
Ideally we would look for specific patterns such as cups with handles,
or nice multi-week basing patterns;
as a trader,
I also look
for other
patterns that could produce trading opportunities, such as double
bottoms and channel breakouts.
Biomet (BMET)
is creeping up nicely in a multi-week channel. Note the rising
relative strength line and the nice symmetry with respect to price and
the lower channel line. BMET looks poised to move past the upper
channel.
Costco (COST)
is moving up the right side of a 20-week cup in a nice orderly manner.
Ideally we would like to see a handle form or for a slight pull back
in price for those who swing trade.
First Data
Corp (FDC)
is basing.
Tricon
Global Restaurants (YUM)
looks poised to move up again,
after a constructive shallow pull back in the last few trading
sessions.
This column was written
by Greg Che, while Loren Fleckenstein is on vacation.