7.23.17 | Update on BAC | Falling Wedge Breakout [bullish]
Updated
The financial sector is still up about 4.5% for the month, despite last weeks down swing. All the major names reported earnings last week and although most of the major names didn't break out they did succeed in capping the selloff. BAC finished the week in indecision, a very good signal for a reversal. The past four trading sessions have closed with a Doji indicating that the buying pressure in the market is getting stronger and going to take control shifting the direction of momentum from down to up. Failure for price to continue to selloff during any of these trading sessions indicates that there is not enough selling pressure in the market to continue the bearish trend. BAC has also formed a bullish Falling Wedge. Right now price is at the tip of the wedge and also testing the support of a new upward channel that has formed in the breakout of the sideways channel. On Friday price closed the day indicating a bullish squeeze out of the falling wedge on Monday. The continued indecision has left price at the neck of the Falling Wedge which has tightened down so much there is no longer room for prices daily volatility, this is the indicator that price is going to breakout on the next session. Emboldened in blue you will see the Falling Wedge at support and the Target Zone at the range of the new upward channel. Confirmation of the Breakout will be a close above $24.10, and confirmation of a Rally to the Target Zone will be a close above $24.50.
Note
Trade Idea VOIDED on 7.26.17
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