Last up is Amazon.com (AMZN), a stock that's forming the same setup as the one in Travelers. AMZN is making an ascending triangle pattern right now, with resistance at $238 and uptrending support coming in below shares. Amazon's pattern doesn't look exactly like TRV's -- it started out with a gap higher, and the first swing high in the pattern fell just short of our $238 resistance level -- but that's a good example of why price patterns are sort of the lowest common denominator in technical trades.
You probably realize that patterns don't work because of some magical geometric force in the market. Instead, they work because they're simple ways to describe the supply and demand forces at work in a given stock; supply and demand, after all, are the only two forces that impact a stock's price.
Twitter and become a fan on Facebook.
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 + 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