This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Big Trades From the Financial Sector

Federated Investors

Investment management firm Federated Investors (FII) is showing traders the exact same pattern right now.

Like AIG, Federated is forming an ascending triangle setup, with a horizontal resistance level at $22 and uptrending support below shares. The pattern in shares isn't the most important thing about this setup, though. When you're looking at price patterns, it's important to think about them in real terms, not in terms of geometric shapes; after all, those shapes may be a good way of describing the pattern, but they don't answer why it matters.

>>10 Most Profitable Banks Trading Below Book Value

For FII, the strong resistance level at $22 is a price level above which there's a glut of supply of shares. In other words, it's a price where sellers have recently been more eager to sell and take gains than buyers were to keep buying.

That said, uptrending support at the bottom of the pattern does indicate that buyers have control of shares at lower price levels. If they can manage to spur a move above $22, it means that the excess selling pressure has been absorbed by increasingly eager buyers and that it makes sense to jump in. After all, the ideal time to buy is when sellers have gotten taken out.

Back in March, shares hit a higher resistance level at $23 (marked by the dashed horizontal line), but I don't think traders need to worry too much about hitting more resistance there. It's likely those are the same sellers who created resistance at $22, but they opted to lower their asks after the correction this Spring.

As with AIG, when the breakout happens, keep a tight stop on Federated Investors.

3 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs