GENE Stock: A Powerful Price Pattern in Development
The wild swings that have characterized the first quarter of 2018 continue, and emotions are running high as investors are trying to come to grips with a number of market-moving events. This uneasiness in the markets has caused the volatility index to remain elevated, and it is why these wild swings persist.
Elevated levels of volatility are not conducive to a market that is primed for an advance, and therefore, the major market indices have sold off as a result. The sectors that performed best last year have sustained deep corrections this year. The good news I have to share is that the volatility will subside, and when it does, the markets will make an attempt at another advance.
One of the hardest-hit sectors has been the marijuana stocks, and Invictus MD Strategies Corp (OTCMKTS:IVITF, CVE:GENE) stock is no exception as it has currently corrected 30.11% from its highs. The reason why I decided to focus on Invictus MD Strategies stock is that there is a very compelling and powerful technical price pattern being painted on the company’s stock chart. The resolution of the pattern will dictate which direction GENE stock is heading in next.
This technical price pattern is highlighted on the following Invictus MD Strategies stock chart.
Chart courtesy of StockCharts.com
The GENE stock chart highlights a technical pattern known as a symmetrical triangle. Symmetrical triangles are very special and powerful price patterns because they are known for their spectacular breakouts.
Symmetrical triangles develop because the price action is characterized by a sequence of higher lows and lower highs. This pattern is easily captured using two converging trend lines, which were created by connecting the sequence of higher lows and lower highs that characterize this pattern.
These trend lines define levels of price support and price resistance, and the completion of this pattern is dependent on the stock’s ability to either break above resistance or fall below support.
Triangles are powerful patterns because the contraction of space between support and resistance causes energy to be stored within the pattern as it develops. This built-up energy is a result of traders positioning themselves on either side of support and resistance in anticipation of the resolution to the pattern. Once the symmetrical triangle is resolved, the stored energy is released and a powerful move usually follows.
I have the inclination to believe that this pattern will be resolved in a bullish manner by breaking above resistance because GENE stock is still within the confines of a bullish trend.
This bullish trend is highlighted on the following Invictus MD Strategies stock chart.
Chart courtesy of StockCharts.com
This Invictus MD Strategies stock chart contains a bullish trend, which is characterized by the quintessential characteristic that defines all bullish trends, a sequence containing a series of higher highs and higher lows.
The uptrend line highlighted on the GENE stock chart was created by connecting this sequence of higher lows that were responsible for creating the bullish trend. This uptrend line acts to define the bullish trend by outlining where price support can be found.
This uptrend line has been in development since July 2017, and over the past nine months, this uptrend line has been tested numerous times, and each and every time, the stock price has bounced off this level of support and higher GENE stock prices have prevailed.
This uptrend line is significant and the sheer number of times it has supported Invictus MD Strategies stock is a testament to this notion. I feel confident in assuming that as long as GENE stock is trading above this uptrend line, a bull market is in development and higher Invictus MD Strategies stock prices will prevail as a result.
The symmetrical triangle is developing right above this uptrend line, and it is why I have the inclination to believe that the symmetrical triangle price pattern will resolve itself in a bullish manner by breaking above price resistance.
If, on the other hand, GENE stock broke below the uptrend line, I would have to assume that the bullish trend has finally run its course and lower prices are likely to prevail.
I am bullish on Invictus MD Strategies stock because it continues to trade in a bullish trend. Within the bullish trend, there is an explosive technical price pattern currently in development, and its completion will dictate which direction GENE stock is heading in next.