GLW Stock: The Sky’s the Limit
I have been watching Corning Incorporated (NYSE:GLW) stock, patiently awaiting a resolution to a price pattern. In October 2016, I outlined this pattern in a publication titled “Corning Incorporated: The Price Point That Will Launch GLW Stock.” I must admit that because of the size and scope of this pattern, I was beginning to believe that Corning stock would be confined to this pattern for eternity.
For those not familiar with my work, I generate my investment views using technical analysis. Technical analysis is based on the notion that historical price and volume data can be used to discern trends and forecast future prices. I have been using technical analysis for close to two decades, and price pattern recognition is a staple in my work. I use these patterns as a signal to shed some light on a stock’s next direction in price.
It’s funny how life works, because just as I was giving up and ready to throw in the towel on Corning stock, the incredible happened: Donald Trump won the race to become the next President of the United States and a huge stock market rally ensued. This rally shattered many records in the process and it continues to defy the proposed outcome alluded to by the naysayers. The renewed enthusiasm for stocks as an asset class is what propelled GLW stock to finally complete an enormous price pattern, with enormous bullish potential.
The following Corning stock chart illustrates the enormous price pattern that is finally complete.
Chart courtesy of StockCharts.com
The GLW stock chart above illustrates an ascending triangle that began to form in late 2002 in the aftermath of the dot-com bubble. This enormous triangle was in development for 14 years. Patterns of this size and duration are extraordinary because long and large patterns translate to equally large and lengthy reactions.
Ascending triangle patterns contain two converging trend lines. Resistance is marked by a horizontal trend line, while support is marked by an upwards-sloping trend line. As time progresses, these trend lines continue to converge, and the amount of space that price can travel between these two begins to diminish at an accelerated pace. These patterns are particularly explosive because, as the pattern progresses, momentum is being stored and will be released when the price finally exits the pattern.
These triangle patterns are also very constructive. As a result, they can be used to create a potential price objective. This is done by taking the depth of the triangle and extrapolating it above the horizontal resistance. This method produces a potential price objective of $47.00 and represents a return of 77.8% from current levels.
The pattern is so big and spans such a long time horizon that a breakout can act like a vacuum that could violently propel the price of GLW stock higher. Let’s not forget that GLW stock hit a high of $94.86 in September 2000, and it is not out of the question that Corning stock could one day test this level once again.
My bullish views on Corning stock are now predicated on it trading above horizontal resistance. This level should act like support in the future and can be used to defined my risk in an appropriate trading strategy.
Bottom Line on GLW Stock
I am, without a doubt, bullish on Corning stock. When I combine the duration it took to complete the price pattern and the explosive characteristics of a triangle price pattern, I can only come to one conclusion: that an epic rally in GLW stock has just begun.