Symantec Stock Is All Set to Make an Advance

SYMC StockSYMC Stock: More Upside Suggested

I am following up on my previous publication about Symantec Corporation (NASDAQ:SYMC) stock in which I dubbed this investment a “rocket ship.” In that publication, I outlined that there were key developments on the company’s price chart that suggested that much higher prices were likely. I was so adamant about my bullish convictions that I even went as far to suggest that an epic run was set to commence.

It has been three months since that publication, and I happy to say that SYMC stock is up 19.1%. This is far from epic status, but I am once again revisiting this name because there are indications on the Symantec stock chart that are suggesting that this rally is far from over.

A quick recap for anyone who has not had the pleasure of reading any of my previous publications: I generate my views on a potential investment by using technical analysis.

This method of investment analysis is based on the notion that historical price and volume data can be used to discern an investment’s trend, as well as forecast future stock prices. This may sound like a silly notion, but I have found great value in this method of analysis, and I am sure that my many followers can attest to it.

The following Symantec stock chart illustrates the large technical price pattern that first suggested that higher prices were a likely endeavor.

Symantec stock chart

Chart courtesy of StockCharts.com

The price pattern that suggested that much higher prices were likely was a “rounded bottom.” This technical price pattern is created when the trading bias slowly changes from bearish to bullish, which creates its rounded shape.

This extremely large technical pattern has been in development for approximately 12 years. A large technical price pattern is expected to have an equally large reaction when the pattern is finally completed.

In January of this year, SYMC stock completed the “rounded bottom” price pattern by exiting above a level of resistance that marked the all-time high set in 2004. Since this breakout above resistance occurred, the price of Symantec shares has only appreciated, and the repercussions of this event continue to suggest that an epic run is in play.

These repercussions stem from the fact that Symantec shares have no overhead resistance, which means that the share’s price is free to continue its ascent unabated. All long investors are currently in the black, and only the shorts who are betting against this company are in the red.

The completed rounded bottom price pattern is useful on many fronts. Not only does it suggest the next direction that the stock price will take, but it is also instrumental in providing a potential price objective. This objective is obtained  by taking the depth of the price pattern and extrapolating it above the horizontal resistance line that contained the price. This creates a target price of $42.00 on SYMC stock.

The price action on the Symantec stock chart continues to suggest that higher prices are likely, which serves to reinforce the view that the target price of $42.00 will be met.

The following price chart illustrates the bullish price action that has been supporting the advance in SYMC stock.

SYMC chart

Chart courtesy of StockCharts.com

In February 2016, the push toward higher prices began. A quick surge in the price caused a “golden cross” pattern to generate. A golden cross is a bullish signal that is produced when the 50-day moving average, highlighted in blue in the chart, crosses above the 200-day moving average, highlighted in red.

This signal indicates that the current bullish momentum is accelerating and, as a result, traders use this indicator to confirm that a bull market is in development.

The golden cross has proved its merits, because Symantec shares have gone on to make an impressive push toward higher prices. This push has been characterized by bullish constructive price action.

Bullish constructive price action consists of a two-wave structure: an impulse wave, which is highlighted in green in the above chart, and a consolidation wave, which is highlighted in purple.

Impulse waves serve to advance the price of the stock, while consolidation waves serve to unwind any overbought conditions that were created and—more importantly—set up the next advancing impulse wave. This wave structure creates the necessary building blocks that allow a price trend to remain sustainable.

The Symantec price chart is littered with constructive price action that continues to suggest that higher prices are on the horizon.

The following Symantec price chart takes a closer look at the current consolidation wave that is in development.

SYMC stock chart

Chart courtesy of StockCharts.com

The consolidation wave that is currently in development is playing out in the form of a descending channel. This channel contains two parallel downward-sloping trend lines. The upper trend line represents resistance, while the lower trend line represents support. The next direction that the price takes will be predicated on which direction the price breaks out of this channel.

All the indications continue to support a bullish advance, so I can only assume that the pattern will resolve itself by breaking above resistance. This action would suggest that the bull market is set to continue, because it would indicate that another impulse wave is set to develop.

Bottom Line on Symantec

I am bullish on Symantec stock because a very large technical price pattern, supported by indicators on the price chart, is suggesting that higher prices are likely. My view on SYMC stock will remain bullish until there are indicators which suggest that another view is warranted.