GLW Stock: Approaching a Critical Level
I am bullish on Corning Incorporated (NYSE:GLW) stock, and my bias has little to do with the fundamental data of this company. Don’t get me wrong; I understand the merits of fundamental data and I never disregard fundamental data but, for my purposes, I have had to look elsewhere to accomplish what I needed from my investment-strategy perspective.
When I first started investing, I was a proponent of value investing, but I soon found out that regardless of the amount of fundamental data I was able to gather, the information was never timely in determining when to enter or exit a trade. I needed to find an edge that gave me the ability to enter a trade prior to a run and exit prior to a drop. Technical analysis gave me the tools I required to apply timely investment strategies. This was the edge that I was looking for.
Applying technical analysis to GLW stock delivers quite a compelling picture. My analysis is grounded on using multiple time frames and multiple indicators to confirm my trading bias. The long-term chart has numerous positive developments that have the potential to evolve into something really big.
The following Corning stock chart illustrates these long-term positive developments.
Chart courtesy of StockCharts.com
The picture being painted on the Corning stock chart above is a large ascending triangle. There are two converging trend lines that make up this pattern. Resistance is marked with a horizontal trend line, and support is marked with an uptrend line. These patterns are seen in a bullish light, as sellers appear at a single price point and buyers appear at higher price points as they step in at higher prices each time a selloff occurs. On average, these patterns break out to the upside.
The level of resistance is marked by the $24.00 price point and is a major level that needs to be breached in order for the bulls to rejoice. A break above this level would open up the door for a run toward the all-time high at $95.40. This price point marked the high for GLW stock set during the of the dotcom bubble, and there is no other resistance level above $24.00. This is a potential 297.5% return if this plays out.
The indicator on the bottom panel labeled “MACD” suggests that a test of $24.00 is probable. Moving average convergence divergence (MACD) is a simple and effective trend-following momentum indicator. Signal line crossings are used to distinguish between bullish and bearish signals. This monthly indicator generated a bullish cross earlier this year and suggests that the bulls have once again taken control of GLW stock.
The Corning stock chart below, using a daily scale, illustrates the bullish developments that reaffirm a test of the resistance level.
Chart courtesy of StockCharts.com
In March 2016, GLW stock generated a golden cross. A golden cross is a bullish signal that is produced when a 50-day moving average, highlighted in blue, crosses above a 200-day moving average, highlighted in red. Traders use this signal to confirm that a bull market is on the horizon. I always found it wise to trade in the direction of this signal. GLW stock is trading above both moving averages and there are no signs that this signal will avert in the near future.
The lower panel labeled “MACD” has just recently generated a bullish signal on the daily chart. It is a bullish signal as outlined above, but this signal comes as the longer monthly signal is also on a bullish signal. This is referred to as a bullish signal on multiple time frames. As a trader, I have come to love such instances because the tailwind created by such signals has been known to break through significant price levels. At minimum, I believe $24.00 will be tested.
Last Words On Corning Stock
I am bullish on Corning stock and believe that a test of a major level of resistance at $24.00 is expected in the not-too-distant future. If the bulls can break through this level, my level of bullishness on GLW stock will elevate to an ecstatic level.