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5 Big Stocks to Trade for Post-Debate Gains

Mitsubishi UFJ Financial Group

So what happens if WMT keeps going sideways from here? We get a setup similar to the one in Japanese bank Mitsubishi UFJ Financial Group (MTU - Get Report).

MTU is currently forming a rectangle, a consolidation setup that's common after big price moves. With the price swings that MTU's been undertaking, it's no surprise that investors need a while to sit back and absorb some of those price moves.

>>9 Stocks to Buy for a European Recovery

A rectangle is formed by a horizontal resistance level above shares and a horizontal support level below them (you can see how it starts off looking like a double-top). The easiest way to think about a rectangle is that it's an "if/then trade": If shares of MTU break above resistance, then it's time to buy shares. If they slide below support, then it's time to short. There's no trade until one of those conditions is met.

Normally, a rectangle doesn't have much directional bias. Unlike an ascending triangle, for instance, there isn't much in MTU's price action that indicates whether buyers are stronger or sellers are. But the fact that MTU has made volume spikes at resistance means that excess supply of shares is getting absorbed by buyers while support catches a bid more easily. That makes a breakout to the upside more likely than one to the downside.

For the upside trade, wait for resistance at $5 to get broken before buying.
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FMX $88.67 1.28%
MTU $4.11 5.38%
TRI $35.71 3.15%
XOM $81.03 1.80%
WMT $66.18 1.32%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

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