KB Financial Group
South Korean financial firm KB Financial Group (KB) is a setup that ostensibly looks a lot like the one in Telecom Italia, save for a few important differences.
KB Financial made two bottoms at $30, back in late September and late December 2011. But this firm has the added input of particularly strong resistance at $42; with four failed attempts of the $42 level, it's a stronger barrier to KB's price action than $30 support is right now.
Despite the differences in the two setups, the trading implications are exactly the same. KB is just stuck in an if/then setup right now.>>5 Cheap Bank Stocks With a Strong Earnings Future Put simply, an if/then setup is a trading pattern whose direction is contingent on how shares of KB exit from their sideways channel. While the double bottom has upside bias, the strength of resistance at $42 means that this stock's direction isn't quite as clear. Instead, if shares of KB break out above $42 resistance, then this stock becomes a buy (just like in shares of Telecom Italia). Otherwise, if shares break down below $30, then the high-probability trade becomes to short KB. While the channel that KB is bouncing around in is wide, remember that the price targets from the breakout or breakdown are proportional. That should leave ample room to profit from this stock.
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