Verizon (VZ) is another name that's showing us an if/then trade -- at least at this point. Verizon put in two tops at the $39.50 resistance level in the past few months, along with finding support twice at $36.75. At this stage in the game, it looks like Verizon is a typical if/then setup, although a breakdown below $36.75 now would make this pattern look more like a classic double top.
Here's the thing: It really doesn't matter which one Verizon is. That's because either way, the short signal comes on a break below that $36.75 level. Individual patterns are great ways of categorizing stocks technically, but ultimately, it's not the trading pattern itself that puts gains in your portfolio, it's the market factors that are making those patterns work.
In this case, the glut of demand for shares below $36.75 has propped Verizon up when shares attempted to move lower. A break below $36.75 tells us that the demand there has been completely absorbed by more aggressive sellers, a solid short signal.I'd suggest also keeping a close eye on that $39.50 level, though -- especially if the broad market is kicking off another leg of the rally this week. I also featured Verizon recently in "10 Dow Dogs That Are Barking for Gains."
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