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1 Stock to Buy, 1 Stock to Short: $30 Stocks

Impatient traders can play a bullish pattern that should resolve in less than two weeks.


These two names are both trading near $30, but their short-term prospects are very different.

Enjoy a Quick Hit with this Bullish Flag

Click chart to enlarge

<br /> Click chart to enlarge

Hartford Financial Services Group (NYSE:HGH) bullish flag pattern tells us that its price seems to be resuming a sharp rally after taking a brief pause. A bullish flag pattern occurs during a dynamic market rally, representing a brief pause as the market “catches its breath” before running off again in the same direction.

The pattern consists of two parallel trend lines, often sloping downward against the prevailing uptrend, and is confirmed when the price breaks through the upper boundary to resume the rise.

Recognia’s Recommendation: Buy HGH at current levels with a target of $31.40 – $31.60 in just 10 days; use a stop loss at $29.56.

With a Megaphone Top, this Stock Should Drop

Click chart to enlarge

Click chart to enlarge

Tyco International (NYSE:TYC) actually has several bearish patterns on its chart, but the one that’s most compelling for short-term traders is the megaphone top. A megaphone top indicates the recent broadening action tells us that trading has been out of control, but a breakout on the downside suggests we’re starting a more decisive downtrend. With its broadening price swings, the Megaphone represents a market that’s unstable and out of control.

It typically consists of two successively lower lows between three higher highs, and the reversal signal occurs when the price breaks down below the second trough (the lowest lows) as a sign of a more decisive bearish move.

Recognia’s Recommendation: Short TYC at current levels with a downside target of $29.00 to $28.60 in 37 days; use a stop loss at $32.22.

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the OpenParabolic Options and Trending123.  Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership. For more information on which service is for you click here.

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