Painting the Town
- Posted by Greg Harmon
- on May 12th, 2014
The S&P 500 joined the Dow in record high territory Monday and it seems like we should celebrate. Let’s paint the town green! And while we are doing it, lets use some products from PPG Industries, $PPG. They do make paint, among other things, and come to think of it this is a large cap company at over $27 billion and those companies are in favor now right? Maybe we should look at the technical set up too before we have too many beverages.
The daily chart above shows the last 12 months of a steady rise from October 2011. Price is now testing the upper resistance of the cup like consolidation over the last 2 and a half months. The momentum set up is favorable with the RSI tightening on 60 and the MACD rising. A break of that resistance higher would give a target of 215 to the upside. The recent history suggests protecting against the 190 area. Point and Figure traders might be concerned as the 3-box reversal chart using the Average True Range (ATR) for box size gives a price objective lower to 169. But if you get your hands dirty a print of 201.50 or higher will change that to a triple top break out with a new price objective of 217.75. This defines your trade.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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