Match Group (MTCH) - Get Report is the parent company of online dating services, Match and Tinder. It is also a supplier of test preparation and academic tutoring services. The stock price has rallied more than 125% off its 2016 low and is currently trading in another of a series of consolidation patterns that have developed as the uptrend has progressed. A successful breakout from this most recent pattern could power another leg up in the continuing rally in the stock.
Shares broke above a six-month downtrend line in April this year and rallied up to new all-time highs the following month, then they just as quickly dropped back down and revisited the initial $17.00 breakout level. With this level as a base a W-consolidation pattern formed above it and below resistance in the $18.10 area, which is also the 50% retracement of the 2017 range.
Last month's W-base breakout took the stock price up to the $19.75 level where it failed and retraced back to the $18.10 resistance-turned-support level. A second run at the $19.75 level failed a second time and the stock price is now drifting lower.
Over time, the $18.10 level has been reinforced by the converging 50-day and 200-day moving averages, forming a zone that should be formidable technical support. The relative strength index and moving average convergence/divergence are trending flat reflecting the lack of positive price momentum and short-term trend direction. This will change if the stock either breaks above the August double top or bounces off the support zone. Money flow readings are weak and will have to improve to support either scenario.
Match is a long candidate after a successful retest of the $18 support zone or the double top breakout, in either case, use a protective trailing stop.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned.