Finally, I want to follow up with a stock that we looked at earlier this month, Stryker (SYK). Like AIG, Stryker has been forming an inverse head and shoulders pattern -- just a much longer-term version of one.
This past week, shares finally broke above their $55 neckline, triggering a buy signal for traders. Now, a throwback is giving buyers a second chance at a low-risk entry on this trade. A throwback is the move back down to the neckline in shares of SYK - and it's actually a good signal for investors.
That may seem surprising. After all, shares have been sliding - but a throwback gives SYK the chance to confirm the strength of its newfound support level at $55. I'd recommend buying this name on the next white bar day above $55.And lest you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent 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
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