Shares of payment services and credit card company Visa Inc (NYSE:V) are giggling green to the tune of more than 20% year-to-date.
While a good part of the financial services stocks had a choppy going this year, V stock comparatively saw a much more orderly incline and thus one that trend followers could play.
Looking ahead at the next few weeks into year-end, stocks like Visa that showed relative strength and a more orderly year-to-date path once again look to stand a good chance of trend continuation.
Last Friday’s better-than-expected labor report for the month of November led to a good-sized rally in stocks and one that saw many sectors of the S&P 500 reverse a good part of the post-ECB slump on Thursday.
The financial sector as a whole however more than made up Thursday’s risk-off day and closed higher for the week. On the daily chart, this movement left behind a clear rejection of the recent trading range lows and thus a sign to the bears that they should back off until the odds come back into their favor.
Looking at the multi-year chart of V stock, we see that the trend since 2011 has been quite orderly but also that the stock is now once again at the very upper end of its channel, and in fact marginally above this upper line of resistance.
Through a multi-month lens at the very least this will beg for some mean-reversion back lower, but into year-end it may offer further upside as underperforming market participants continue to chase what has trended higher all year.
Visa Stock Charts
On the daily chart, we see that V stock continues to respect its yellow 21-day moving average very well. After breaking back above it in early October Visa has held this line on a weekly closing basis. In late October/early November, the stock also nicely and orderly overcame its previous year-to-date highs from late-July and thus made the blue shaded area a layer of support.
Over the past couple of weeks the stock once again began to consolidate, and last Friday’s 2.7% rally made a bullish statement, breaking out of a bull flag pattern. From here, active investors and traders could look to see if the momentum sustains for an initial move into the $84 area whereas any strong bearish reversal would at least temporarily cool the setup.
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Successful trading and investing starts with a plan. Download Serge’s essential trading plan, TheEssence of Swing Trading e-book. As of this writing, he did not hold a position in any of the aforementioned securities.
