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5 Service Sector Stocks Triggering 'Buys'

Stocks in this article: CRMDCMSJRTSMV

Shaw Communications

Another foreign communications stock that's forming a similar pattern is Shaw Communications (SJR), the $10 billion Canadian telco. Like DCM, Shaw is forming an ascending triangle pattern -- the key differences are that SJR's pattern is coming after a long-term uptrend and that this one hasn't broken out yet. That gives traders a chance to get in earlier with Shaw.

Shaw Communications currently has resistance sitting right above $24. That means that a breakout above that $24 level is the buy signal for this stock.

Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles, rectangles and other pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

Resistance at $24 is a price where there's an excess of supply of shares; in other words, it's a place where sellers have been more eager to take recent gains and sell their shares than buyers have been to buy. That's what makes the breakout above $24 so significant. It indicates that buyers are finally strong enough to absorb all of the excess supply above that price level. That's when you want to own shares.

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