Visa (V - Get Report) is another name that's making sideways moves after rallying hard for the better part of the last year. Shares of the payment processing giant have climbed more than 32% in the trailing 12 months, besting the broad market's performance by a wide margin.
Now Visa's trading in between a horizontal resistance level at $162 and horizontal support at $153. That bouncing in between two horizontal price barriers means that Visa is in a consolidation pattern called a rectangle -- in short, the pattern is common after big price moves because it gives market participants a chance to catch their breath and plan their next move. For technical traders, there's no planning involved; just wait for the breakout above $162 or below $153, and then pile in behind in the direction of the breakout.
More often than not, rectangles are continuation patterns. And since Visa has been in a distinct uptrend, that makes an upside breakout look like a slightly more plausible scenario. But it's critical to actually wait for shares to exit the rectangle before jumping onboard; a negative divergence in momentum right now could spell trouble for shares.
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