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TheStreet Open House

5 Big Trades After the Fed Meeting

NYSE Euronext

With a pending merger deal ongoing at NYSE Euronext (NYX), it'd be easy to write this stock off as not tradable. After all, acquisition targets tend to have hard resistance levels at their offer prices, a barrier that dramatically limits upside -- but not in this case. Since NYX's shares are getting indexed to shares of acquirer IntercontinentalExchange (ICE), and because there's ample time until the deal closes, this stock is still tradable.

>>5 Stocks Rising on Unusual Volume

That's a good thing because of the bullish price action that's currently showing itself in shares of the world's most storied exchange owner.

NYX is currently forming an inverse head and shoulders pattern, a setup that indicates exhaustion among sellers. The inverse head and shoulders is formed by two swing lows that bottom out at approximately the same level (shoulders), separated by a deeper trough between them (the head). The buy signal comes on a breakout above the neckline, which was $41 for NYX. That buy signal triggered at the start of this week.

A minor correction is giving traders a second chance at a low-risk entry in NYX. I'd recommend going long this name on the next white bar day. Just keep a tight stop at the 50-day moving average.

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