Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free webinar this Wednesday, July 22.
Global Payments (GPN) — This provider of electronic payments transaction processing services trades in well-defined and fairly lengthy swings from a long-term perspective. This makes it an attractive stock for swing traders to follow.
GPN’s sharp, near-100% rally off the early 2009 lows re-tested a previous all-time high near $54 by the end of that year that dated back to March 2006. Since then, GPN has failed to break to loftier levels. In fact, since the stock’s reaction high in late 2009, it has re-tested the $54 area twice more, and while getting rejected each time, did manage to make a higher respective low each time.
In other words, from a multi-year point of view, GPN has now bumped up against this major resistance area at $54 no less than four times, and since 2009, has displayed the at-the-margin bullish pattern of making higher lows. Stocks that develop higher lows versus clearly defined resistance areas stand a good chance of significantly breaking past that resistance.
On the daily chart, note that GPN has steadily worked higher off the June lows with a series of mini-consolidation phases that pushed the stock past a first resistance line on Monday, which dated back to the May high near $48.90.
As the stock works itself toward the long-term resistance area at $54, it has two more reference levels that traders can focus on, namely $49.90 and $51. While I don’t expect this to happen in a straight shot, the stock now looks headed toward $54 again, and as mentioned above, ultimately stands a good chance of breaking to new multi-year highs.
Please note that the company is scheduled to report earnings on Thursday, July 25.