MDRX Stock: The Anticipation Continues…
Earlier this year, I stated numerous times that the market that characterized 2018 was nothing like 2017. The 2017 stock market was characterized by a progressive move toward higher values that was accompanied by low volatility. 2018 started out quite differently, as the market was characterized by high volatility and stuck in the grips of a violent correction.
The reason why I am bringing this up again is because the current market environment is starting to remind me of 2017. The markets are once again making a progressive move toward higher prices, which is accompanied by low volatility. This is a very healthy environment for stocks, and not even a trade war has been able to derail it. As a result, I have no problems stating with complete conviction that stocks are poised for further gains.
With this bullish affirmation, I am returning to focus on Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) stock. I have been watching the price action on the Allscripts stock chart with great anticipation. The reason why is that an extremely large and powerful technical price pattern has been developing on the stock chart. Once it is resolved, a powerful move in MDRX stock is expected to follow.
I have been writing about this technical price pattern for a number of years now, waiting for that fateful day when the pattern is finally resolved.
MDRX stock just reported better-than-expected earnings on August 2, 2018, which caused the share price to surge by 10% on August 3, 2018. This move has not yet resolved the technical price pattern, but it has brought it one step closer to a bullish resolution.
The pattern in question is highlighted on the following Allscripts stock chart.
Chart courtesy of StockCharts.com
The extremely large and powerful technical price pattern developing on the MDRX stock chart is a symmetrical triangle.
A symmetrical triangle is created when the price action is characterized by a sequence of lower highs, which are followed by higher lows, followed by lower highs and so on.
The price action creates a coiling pattern that is effectively captured by connecting the peaks and troughs created by the higher lows and lower highs. The end result is two converging trend lines that create a picture depicting a triangle.
These trend lines are very important and pertinent because not only do they capture the pattern, but they also pinpoint where significant levels of price support and price resistance reside.
This is important and pertinent information because, in order to escape this pattern, Allscripts stock needs to either break above price resistance or fall below price support. At this moment, price resistance for Allscripts stock currently resides at $15.00 and price support resides at $10.50.
The move that follows is expected to be extremely powerful because triangle price patterns are known for such an outcome. The power generated by this pattern is created by the pattern’s ability to build and store energy that acts like a coiled spring.
This phenomenon of storing energy is created by the convergence between price support and price resistance as the pattern develops. This energy comes from traders identifying the pattern in development and positioning themselves on either side of support and resistance in anticipation of a breakout. Once a breakout does occur, the energy is released.
The size of the triangle pattern in development is directly related to the move that is expected to follow. As I mentioned earlier, this technical price pattern is extremely large—it is now 18 years in the making. This is probably the largest triangle I have ever come across, suggesting that the move in MDRX stock that follows is going to be in epic proportions.
The issue that remains is that the pattern has yet to be resolved, and a breakout is now long overdue. The good news is that a breakout in MDRX stock is inevitable because the contraction of space between price support and price resistance cannot continue forever.
But until that fateful feat does occur, I will sit on the sidelines watching Allscripts stock with great anticipation.
An extremely large technical price pattern continues to develop on the Allscripts stock chart. I am watching this pattern with great anticipation because I believe that once this pattern is resolved, an extremely powerful move in MDRX stock will follow.