Mid-cap bank City National (CYN) is showing traders a nearly identical setup right now. Shares rallied higher off of an inverse head and shoulders bottom that triggered back in late December, and they've been locked in a textbook uptrending channel ever since. Each of the past three times shares tested trend line support, they've reversed and rallied higher. Now the question is whether CYN can do it again for a fourth time.
Again, even though shares have moved lower for the past month or two, the fact that support hasn't been broken means that the uptrend is still intact. In CYN, I'd be a buyer on the next bounce off of support - with early price action looking strong this morning, it could trigger today. Either way, keep a tight stop on this trade.
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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