Small-cap financial services firm Kemper Corporation (KMPR) is another name that started the year off strong, only to turn toxic for shareholders in the last few months. For this stock, the red flag is coming from a descending triangle pattern.
Basically, the descending triangle is formed by the combination of horizontal support below shares and downtrending resistance above them. As KMPR bounces in between those two technically important price levels, it's getting squeezed closer and closer towards a breakdown below support. The support level to watch in Kemper is $30.30 -- that's our sell signal for this stock.
While it may seem anti-intuitive, trading volume over the course of this pattern adds some extra evidence that the setup is worth heeding. When the breakdown below $30.30 happens, we'd expect to see volume spike higher as sellers flood the market with shares.
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