1 Stock to Buy, 1 Stock to Short: Media

TWC should continue a slow and steady rise, while P goes down in flames

   

All day I scan the charts looking for technical patterns to trade. My Trending 123 Pattern Scan powered by Recognia is one useful tool I have to scan the markets quickly, and it is showing two polar opposite technical events for these two communications stocks.

Buy the Continuation Diamond

6 21 13 twc 300x262 1 Stock to Buy, 1 Stock to Short: Media
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Time Warner Cable
(TWC) is a cable provider that has developed a bullish continuation diamond, and is primed for a long-term uptrend despite the selloff in the past few days.

The price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. The pattern begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamond’s boundary lines, it marks the resumption of the prior uptrend.

Recommendation: Buy TWC for a $112.00 – $115.00

 Short the Bearish Pennant

6 21 13 p 300x260 1 Stock to Buy, 1 Stock to Short: Media
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Pandora Media
(P) is an ad- and subscription-based service that delivers streaming music online. It has developed a short-term bearish pennant over the past 9 days.

The price seems to be resuming a sharp decline after taking a brief pause. A bearish pennant pattern occurs during a dynamic market decline, representing a brief period of indecision before running off again in the same direction. The pattern consists of two converging trend lines with diminishing volume, and is confirmed when the price breaks down through the lower boundary to resume the decline.

Recommendation: Short or play puts on P for an $11.70 – $12.40 target in the stock.

 

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.


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