London-based publishing company Reed Elsevier (RUK) is one of the world's biggest providers of information for medical, scientific and financial professionals. With shares of the company forming an outwardly bullish pattern, this $18 billion ADR could be due for a significant breakout. Here's how to trade it.
Right now, shares of Reed Elsevier are forming a bullish ascending triangle setup, a formation that's marked by horizontal resistance above current price levels and uptrending support below. As share prices get squeezed in between those two technically relevant levels, the potential for a breakout above that horizontal "price ceiling" increases significantly.
Don't pay too much attention to the "gappy" appearance of Reed Elsevier's chart. Those gaps, known as suspension gaps, are the result of the stock's trading on the London Stock Exchange outside of U.S. trading hours. They can be ignored from a technical standpoint. Instead, traders should be watching for a breakout above the $37 price level in RUK. Once shares materially surpass that price, it becomes a high-probability buy.Reed Elsevier is one of the highest-yielding media stocks. >> Get your technical analysis on the go with TheStreet's iPad app.
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