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."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV