Visa Stock: Trend is Your Friend
Visa Inc (NYSE:V) stock is up 725% off of its 2009 lows, and has been a stellar performer for those lucky enough to have ever purchased a share of V stock. Many should be familiar with this name, as they are a technology company that empowers the global ecommerce platform and allows consumers to do away with paper currencies in favor of their digital counterparts. Visa has laid the framework that has allowed such a paradigm to take place.
I have adopted quite well to this regime, as I use only my credit card to make all my daily purchases. I am sure I am not the only one who has adopted this habit, as Visa rewards me for every dollar I spend in terms of points that I can redeem for rewards. Holders of Visa stock have benefited from this shift and I have been rewarded with exponential gains. The good news is that the trend toward higher prices is showing no sign of abating.
The chart of V stock is a thing of beauty. and the beauty really comes from its simplicity. The following chart illustrates the simple channel that has developed.
Chart courtesy of StockCharts.com
There are two parallel lines that define this trend. The pattern is known as a ascending channel has two trend lines that define the upper and lower bounds. The share price oscillates between these two lines for as long as the trend permits. The trend will end when shares finally gather enough strength to break out of this channel.
This trend is made even more compelling by its length and duration. longer defined trends are more significant and carry more weight. Many traders will be able to distinguish this trend with ease, and will be on the lookout for key areas of support and resistance in Visa stock chart in order to act.
The following chart illustrates the recent positive developments in Visa stock that reaffirm the trend.
Chart courtesy of StockCharts.com
The focus of this V stock chart is the averted death cross and the breakout of the rising wedge.
A golden cross indicates that a bull market is on the horizon, and a death cross indicates that a bear market is on the horizon. The signal is generated when the faster-moving average (50-day moving average) moves above or below the slower-moving average (200-day moving average). The golden cross and death cross are exact opposites of each other.
Averted moving average crosses are also signals, and traders use them to reaffirm a trend. In March of 2016, V stock attempted to generate a death cross, but that signal was quickly averted as bullish pressures quickly mounted. The inability to remain bearish is key takeaway. Averted signals have a tendency to increase the slope of the dominant trend.
The breakout of the rising wedge on the Visa stock chart reaffirms this theme. A rising wedge is created using two trend lines. the level of resistance has a trend line with a positive slope and, similarly, the support line also has a positive slope, but this slope is steeper. These two trend lines create the wedge. Wedges are predominantly continuation patterns and are dependent on the dominant trend that leads into the pattern
I love this pattern because it serve two purposes; I can use it to set a price objective and I can manage my risk at the same time.
The Bottom Line on Visa Stock
Visa stock is trading within a well defined uptrend. this trend is contained within an ascending channel and that trend sees no sign of abating, as a new pattern has suggested further appreciation in price. I am bullish on V stock and will remain bullish until the technical picture warrants a change in bias.