We're seeing the exact same setup in shares of $18 billion medical device stock Boston Scientific
(BSX - Get Report) right now. Like Yahoo!, BSX is a textbook symmetrical triangle trade, coiling between its own pair of converging trend lines. The big difference is where shares of BSX are sitting right now.
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The buy signal comes on a breakout to the topside of the pattern, currently at $13.70. That means that BSX is testing a breakout in this morning's session. Traders can be a little more aggressive with a buy signal in BSX because of momentum
, measured by 14-day RSI. Our momentum gauge broke out of a downtrend this week, and that puts a higher probability on price following suit.
Still, it's crucial to wait for price to make its move before jumping into a trade in BSX. Avoid being a buyer until shares can close above our $13.70 trendline. After that, the 50-day moving average
is a good place for a protective stop.
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