Turning stateside, we have Scotts Miracle-Gro (SMG). Following another strong rally that sent shares of Scotts up more than 15% in the last six months, this stock hit its head on $54 resistance and reversed down to support at $49. But sitting at that support level didn't last for long, and soon shares were retesting resistance once again.
Now, with a sort of bizarre cup and handle forming in shares of Scotts, traders will want to watch for this third test of resistance.
A few factors bode well for a new test of resistance in Scotts. First is the series of higher lows that form the "handle" in shares. Then there's the added support at the 50-day moving average, presently around $51. Even so, I wouldn't suggest going long until shares actually sustain a break above $54. Until then, Scotts could just as easily fail at resistance for a third time.To see these plays in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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