Lincoln National (LNC) is a financial stock that's forming a channel of its own... But with a twist.
That's because the $12 billion wealth management firm is moving sideways in a range-bound trade called a rectangle. The setup gets its name because price action is essentially "boxed-in" by resistance above shares at $45, and support to the downside at $42. Instead of buying within the channel, rectangles are breakout trades - you want to trade this name when it breaks outside of the box.
That means that a move through the $45 level is a buy signal, and a move through support at $42 is an indicator that it's time to sell (or short) LNC. Right now, there's some extra bias to the upside - typically, rectangles are continuation patterns, and since Lincoln's preceding price action was up, it's likely next move is up as well. Still, it doesn't become a high probability trade until the breakout happens, so wait to get your direction from the market.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts