With the Materials sector switching to buy mode in my Sector Breadth Model I have looked inside the sector searching for industries with improving breadth over the last two weeks. Two industries – Chemicals and Steel – are showing improving internals. Looking through charts I chose Huntsman Corp. (HUN) as a candidate for a long position.
HUN is in the medium-term uptrend and challenging the 52-week high. The vertical count from July’s low gives a price target at 17.75. The November consolidation has formed a Symmetrical Triangle – a continuation pattern. The height of this triangle applied to the potential breakout point on the upside gives us 17.75 as well.
Technically, a buy signal will be issued when the price hit 16.75 (lime box). Anticipating the breakout and trying to get better risk/reward ratio I have decided not to wait for a buy signal and opened a long position today. If I am wrong, I will know soon enough. A sell signal will be issued at 15.50 (pink box).
10.06 AM Bought to open HUN January 13 15 Call 6 contracts at $1.60.
Disclaimer: I express only my personal opinion on the market and do not provide any trading or financial advice (see Disclaimer on my site).
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HUN Is Forming A Symmetrical Triangle
Published 12/16/2012, 04:27 AM
Updated 07/09/2023, 06:31 AM
HUN Is Forming A Symmetrical Triangle
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