Flextronics International Ltd. Charts: Where Flex Stock is Going

Flextronics stockFLEX Stock: Trending Up

I am bullish on Flextronics International Ltd. (NASDAQ:FLEX) stock, and what caught my eye originally was the size and scope of the bullish pattern that I just happened to stumble upon.
FLEX stock has generated a bullish pattern that has defined trading since its shares bottomed in 2009. Large patterns that span over long time periods are more significant and have a tendency to outperform similar smaller patterns over short time horizons.

When analyzing a chart, it is always a must to view the charts on multiple time frames. The time frame I use will depend on the duration I wish to hold that position. I always start with a longer-term time horizon, as this eliminates noise and smooths out the signals. This makes discerning trends a much easier task. Shorter-term time horizons are effective in timing entry and exit points.

The following Flextronics stock chart illustrates the scope and size of the bullish trend.


Chart courtesy of StockCharts.com

Since FLEX stock bottomed in 2009, the trading action has set up a large and long ascending channel. An ascending channel is a bullish pattern that consists of two positive sloping parallel lines that contain the price. FLEX stock will oscillate from support and resistance, and this trend will continue for as long as time permits. The standout with regards to this pattern is that the longer I hold onto Flextronics stock, the levels of support and resistance continue to move higher as well. Buy and hold investors love these type of patterns.

The panel on the bottom of the chart labeled “MACD” supports the bullish premise. 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. A bullish cross just generated on the monthly chart above means that bullish momentum has overtaken the bearish momentum, and the bulls are now in full control of FLEX stock.

It is worthy to note that the size of the channel on the Flextronics stock chart is extremely significant. Large and long patterns tend to outperform small and short ones. This same notion goes for patterns that break; if the upper or lower trend lines are broken, a quick and violent reaction is expected.

The following Flextronics stock chart reaffirms the bullish premise.


Chart courtesy of StockCharts.com

The trading action highlighted on the FLEX stock chart above can only be constructed as bullish. Healthy bullish charts contain similar price action, where short bursts going higher (labeled as impulse waves) are followed up by sideways trading action (labeled as consolidation waves).

Impulse waves that are followed up by consolidation waves are frequently proceeded by another impulse wave of equal length and duration. It is very rare for these patterns to abort at this point.

The current consolidation wave is defined as a diamond pattern. It might seem like a rare consolidation pattern, but I assure you it is not. This wave has just completed, and a new impulse wave has begun. The potential price objective of such a wave is $16.00 on Flextronics stock.

When this impulse wave completes, it opens the door for another consolidation wave to develop. The $16.00 price objective might also line up with the resistance level outlined on the ascending channel, but only time will tell.

The Bottom Line on Flextronics Stock

I am bullish on Flextronics stock, and the patterns and signals that I highlighted above support my bias. My bias will remain bullish for as long as FLEX stock trades above the support level defined by the ascending channel.