Symantec Corporation: SYMC Stock on the Verge of a Major Breakout?

SYMC Stock: Bullish on All TimeframesSYMC Stock: Bullish on All Timeframes

When you use charts as your only resource to determine the attractiveness of an investment, it can be easy to get lost in all the noise. Chart patterns can paint different pictures on different timeframes, making them quite confusing. When using a chart as your sole resource for trading, it is critical to view the chart across multiple timeframes. Symantec Corporation (NASDAQ:SYMC) stock chart is a great example of how looking at multiple timeframes can help to confirm one bias.

Follow me as I take you through the short-, medium-, and long-term charts of Symantec stock. I will use three perspectives to confirm a trading bias that is leading to one major breakout.

The following chart illustrates the short-term trend in SYMC stock:

On April 4, 2016, SYMC stock generated a golden cross. A golden cross is a bullish signal that is produced when a faster moving average (the 50-day moving average) crosses above a slower moving average (the 200-day moving average). Traders use this signal to confirm a bull market is on the horizon.

A few months following that signal, SYMC stock tested the 200-day moving average and proceeded to create a flag pole and pennant on the short-term chart.

A pennant is a formation that signals a continuation of the trend that preceded it. The general rule about pennants is that they mark midpoints. Patterns that mark midpoints can be used to project a target price. Without going into the logistics, the target price of this pattern is $24.50.

symantec corp nasdaq chart 1

Chart courtesy of www.StockCharts.com

One rule to remember about pennants: the pattern is always preceded by a sharp advance, called a flag pole—without the flag pole, the pattern is just a common triangle.

The directional bias based on the short-term chart is bullish.

The following chart illustrates the medium-term trend in SYMC stock:

The surge higher in share price has taken out a horizontal resistance level that marked the highs in early 2015. The on balance volume (OBV) indicator made a new high prior to the breakout. The OBV served as a leading indicator that eluded to a possible break of the resistance level.

For those not familiar with the OBV, this indicator uses volume to compute buying and selling pressure. It is produced by cumulatively adding volume on up days and subtracting volume on down days. The data is then plotted on a chart and can be used to help discern the trend. Traders use it as a leading and confirming indicator.

symantec corp nasdaq chart 2

Chart courtesy of www.StockCharts.com

The directional bias on the medium-term chart is bullish and the OBV has confirmed the move higher.

The following chart illustrates the long-term trend in SYMC stock:

symantec corp nasdaq chart 3

Chart courtesy of www.StockCharts.com

I love using long-term trends because we can get the big-picture perspective.

I have outlined a rounded bottom in the long-term chart above. A rounded bottom is a long-term reversal pattern. It represents a bias change from bearish to bullish. The longer the period of consolidation within the pattern, the more significant it becomes when it is finally complete.

SYMC stock has been forming this pattern for 12 years. A break above the 2004 highs at $25.20 would confirm a major bullish breakout. A primary price objective would be $42.00 per share—a possible 88% return from current levels.

The directional bias of the long-term chart is currently neutral. A break above the 2004 high will confirm the bullish pattern and would an extremely bullish signal.

The Bottom Line on SYMC Stock

SYMC stock is firing on all cylinders and in this case, the cylinders are multiple timeframes. The short- and mid-term timeframes are projecting a test of the 2004 high. The 12-year rounded bottom is pointing toward a major breakout. If SYMC stock can close above that level, the trend will likely accelerate.

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