Don’t look now, but CMG is back on the move – and potentially in a very big way. The chart below outlines the large, multi-month ascending triangle that’s been forming, and currently we’re seeing a breakout attempt in the stock.
But can it stick?
That’s always the million-dollar question, but with a solid uptrend in place and prices now pushing to new highs, I certainly wouldn’t bet against it. In fact, I like it for a push to the $425 area, which is the projection of this pattern (add widest portion of triangle to breakout zone).
Here’s a closer look at the chart:
An aggressive stop would be a gap fill to the 12/30 close of $337. Nice setup, and this is the kind of play I’d consider not for a swing but rather for a position trade, as I would expect it to take more than a couple of weeks to achieve the target.
Hi Jeff,
A short time ago you had noticed Walmart, WMT, was forming a cup and handle. You were correct – I had thought it could also be a roll over downward – and it has now broken to the upside.
How would you calculate a target on a handle and cup? Would it be a function of the depth of the cup? I went with one contract 57.50 and it is now at 60.33, having fallen back at close from todays high of $61.00.
Thanks much.
Best regards,
John
Hey John, Happy new Year! With WMT a little market strength goes a long way, so I don’t view it as an “I was right” situation at all, but simply a setup which played out technically. I think it heads at least to $62, just based on the measured move of the height of the cup added to the breakout. Given some market momentum beyond that, it could reach closer to $64 (’08 high). That’s how I view it, and hope your calls pay off! Don’t be shy about locking in a solid gain when you have it, as options have that pesky expiration date tied to them 😉