Breakout Rehearsal

Like actors on a movie set, traders often have to
just sit and wait for the props, lighting, and camera to get set up. Once the
setup is in place, you have to go out and perform to the best of your abilities.

Paychex
(
PAYX |
Quote |
Chart |
News |
PowerRating)
spent much of the day trading above its Sept. 28 high, but
into the close, pulled back below it.

With a setup like PAYX’s, the waiting can get frustrating and
it’s easy to fall asleep at the wheel and let an opportunity slip by. Here we
are today with PAYX bouncing higher off a three-week trendline and its 50%
retracement off the Oct. 13 low and the Oct 31 high. Then…a timid breakout
attempt that failed into the close. But the probing is encouraging as PAYX
squeezes into a congestion pattern between the trendline and the old Sept. 28
resistance level.

Who knows, maybe this was just the rehearsal before the actual
performance where PAYX truly breaks put on an expanded range and heavy volume.

Until Friday,

Eddie