As I’ve mentioned in the past, it’s not unusual for the same pattern to crop up in a particular sector—but it is rather unusual when the same pattern shows up in opposite directions. Here are two pharma stocks that my Trending123 Pattern Scan powered by Recognia has identified.
After a temporary interruption, the prior uptrend is set to continue. A bullish continuation wedge represents a temporary interruption to an uptrend, taking the shape of two converging trendlines that are both slanted downward against the trend. During this time, the bears attempt to win over the bulls, but in the end the bulls triumph as the break above the upper trendline signals a continuation of the prior uptrend.
Current Price: $5.58
Upside Target: $8.50 – $9.20
The bearish version of a continuation wedge is essentially the same idea as the bullish pattern, just reversed. The pattern itself represents a temporary interruption to a downtrend, taking the shape of two converging trendlines slanted upward against the trend. A break below the lower trendline signals confirmation of the pattern and is a sign of additional downside to come.
Current Price: $0.76
Anticipated Downside: $0.56 – $0.60
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 Open, Parabolic 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.