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1 Stock to Buy, 1 Stock to Short: Business Services

Bad for MSTR, good for short sellers


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 stocks.

Buy the Continuation Wedge

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Datawatch Corp.
(DWCH) is a company that provides data analysis software to businesses, and its stock is showing a bullish continuation wedge over the past 24 days.

After a temporary interruption, the prior uptrend is set to continue. A continuation wedge represents a temporary interruption to an uptrend, taking the shape of two converging trendlines 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.

Recommendation: Buy DWCH for a $14.70 – $15.10 target

Short the Bearish Flag

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(MSTR) is a business intelligence software provider that has developed a bearish flag in its stock over the past 15 days.

The price seems to be resuming a sharp decline after taking a brief pause. A bearish flag pattern occurs during a dynamic market decline, 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 upward against the prevailing downtrend, and is confirmed when the price breaks down through the lower boundary to resume the decline.

Recommendation: Short MSTR for a $79.00 – $82.00 target.


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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