Last up is NXP Semiconductors (NXPI), a Dutch chipmaker that's forming a very similar setup to Deutsche Bank right now. Like DB, NXPI is forming a head and shoulders topping pattern, in this case with its neckline at the $22 level. A breakdown below that line means that NXPI is a short candidate.
Near-term support at the 200-day moving average (currently around $19) looks like a realistic target for this setup right now - on the neckline break, I'd suggest planning on exiting ahead of hitting that potential glut of demand for shares.
Even though the head-and-shoulders (and its inverse) is likely the most well known technical pattern, it's still a valuable one: an academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant."That's a good reason to keep an eye on both NXPI and DB this week. To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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