Ameriprise Financial (AMP - Get Report) is showing traders a more directional setup right now. Shares of the $10.5 billion financial services firm have gotten dragged down alongside the rest of the industry in 2011, tumbling more than 19% year-to-date, but this stock is showing signs of a bottom right now.
More precisely, that bottom came in early October, when Ameriprise mirrored new lows being set in the broad market. Since then, shares have bounced higher to form an inverse head-and-shoulders setup, a pattern that indicates exhaustion among sellers. In Ameriprise, the buy signal comes on a breakout above the pattern's neckline at $48. While it's a short-term pattern, the trading implications look strong in this name going into 2012.
RSI is confirming the upside bias in Ameriprise right now. A break of the RSI trendline would be an early warning signal to watch for a sell signal in Ameriprise. In the mean time, it makes sense to keep a protective stop just under the right shoulder at 44.I also featured Ameriprise, which shows up on a list of 5 Cash-Rich, Low P/E Stocks, in " 7 Dividend Stocks Shoveling Cash to Shareholders."