There is high correlation between oil prices and oil service companies as shown in the chart below. So I would expect an increase in oil prices will push Oil Services ETF (OIH) upwards.
Below OIH has formed a 4 year almost symmetrical Head & Shoulders, but what is interesting is that the pattern failed as of last week by closing above the right shoulder major resistance level of 45.80. This resistance zone is significant because it has kept prices down for over 20 months. I am projecting a possible target of 55.
What is so special about EBAY current stock price? Well back in 2004, $56-$59 was the zone (shown in red) where it reversed its trend and went into a 4 year bear market.
Fast forward to the future, another 4 years and Ebay is back to that zone. What is currently happening in that zone is interesting, as it has formed a 5 months consolidation rectangle pattern. Watch the breakout of this rectangle
Unfortunately there is no way to trade TSLA. Simply because there is no pattern, only higher highs. If you are investing in the stock I understand you, but if you are trading it (successfully) please tell me how you are choosing your stop loss levels, entry, and targets!
Viasat Inc (VSAT) is one boring stock but one that is very profitable if you trade the breakouts. VSAT previously has formed 2 rectangles or darvas box. The first one as shown below was a 2 months rectangle that was difficult to trade because the breakout day achieved the target and much more. The second breakout was a 3 months rectangle also that broke uP. Currently we are in a 3rd rectangle a breach of the barriers at 67 or 73.50 completes the pattern either way. I am betting on the downside. Keep it on your watch list and share with other traders 🙂
The below chart of Analog Devices (ADI) strikingly conveys the theory of “the trend is your friend”. But looking more closely, I have highlighted instances where chart patterns (specifically Head & Shoulders). These patterns give more confidence in holding or selling the stock.
Starting in 2009, ADI formed a H&S bottom (highlighted in the first box) and broke out starting its rally to this date.
The second box illustrates a H&S top that failed and the stock continued to rally.
Third box shows a H&S Top which probably had a lot of people selling/shorting the stock. Although the stock reached its breakdown target, it did not violate the trendline in place since mid 2009.
Fourth box show a continuation H&S bottom that broke upwards.
Recently, ADI formed a 5-months H&S bottom that broke out with an implied target of 52.
If this chart beautifully illustrates one thing, it is how chart patterns greatly increase the confidence of your trade and clearly defines boundaries in case of accumulation of the stock.
Pitney Bowes (PBI) has a very similar H&S bottom as Blackberry had in this post. Keep a close watch on PBI. A close above 16.50 completed the pattern and projects a possible target of 23.0. However if it chooses to follow Blackberry’s path we could see it in single digits soon.