SYMC Stock: Painting the Chart
I have been patiently waiting for Symantec Corporation (NASDAQ:SYMC) stock to complete a long-term price pattern on the stock chart. This pattern will dictate whether a substantial run in share price will occur. I have outlined in my previous publications that I did not believe that a level of resistance at $25.00 would be broken on the first attempt. Since that report, this price level has consistently rejected SYMC stock from appreciating beyond it.
The first failed attempt of breaking beyond this level is the reason why I originally pulled my bullish view and instilled a neutral bias. This did not mean I was bearish on Symantec stock, I just preferred to see a pullback in price before another attempt at $25.00 was made.
The reason why I preferred to see a pullback in price was because this action would create a bullish price pattern on the SYMC stock chart that traders would not be able to ignore. The potential run from such a price pattern would be explosive.
The following Symantec stock chart illustrates the pattern that is currently being painted on the stock chart.
Chart courtesy of StockCharts.com
The SYMC stock chart above illustrates the big-picture perspective. Symantec stock has been forming a rounded bottom pattern for the last 12 years. A rounded bottom is a long-term reversal pattern. It represents a bias change from bearish to bullish. The longer the period of consolidation within the pattern, the more significant it becomes when it is finally complete.
When this pattern finally does break to the upside, the initial target price for SYMC stock will be $42.00, and this will be based on extrapolating the depth of the pattern above the horizontal resistance line. The $42.00 price objective will be the first stop.
I have mentioned numerous times that I did not expect price to surge through this level of resistance on the first attempt, and that I would have rather see price fall back towards $20.00 first. Testing this level of support prior to attempting a breakout of resistance would mean that SYMC stock had put in a bullish cup-and-handle pattern. Painting the chart with this pattern would serve to reaffirm the larger bullish price objective of $42.00.
Price has persisted on resistance like a piece of gum stuck on the bottom of a desk. Neither a pullback nor breakout has occurred, but price has remained constructive, and as a result, a move in the price of Symantec stock is now expected.
The following Symantec stock chart illustrates the pattern that is suggesting that a move in price is now expected.
Chart courtesy of StockCharts.com
The SYMC stock chart illustrates the bullish price action that has dominated the landscape in 2016.
The bullish price action consists of impulse waves that take the stock price higher, and consolidation waves that alleviate any overbought conditions and set up the next impulse wave.
On the Symantec stock chart above, the impulse waves are highlighted in green, and the consolidation waves are highlighted in purple.
Shortly after the first impulse wave off the 2016 lows, a golden cross was generated. A golden cross is a bullish signal that is produced when a 50-day moving average, highlighted in blue, crosses above a 200-day moving average, highlighted in red. Traders use this signal to confirm a bull market is on the horizon because is it indicates that bullish momentum has overwhelmed any bearish momentum, and as result, the bulls are in full control.
The golden cross was one of the first indications that the bullish price action was going to persist.
Each impulse wave had been proceeded by a consolidation wave that set up the next impulse wave. In 2016, all impulse waves thus far have broken to the upside.
The current consolidation wave is approaching completion and the direction of the next impulse wave will be based on which way price breaks out of the consolidation wave.
A bearish breakdown, and support outlined at $20.00-$21.00 would be the next price objective.
A bullish breakout, and SYMC stock would be set to create a new all-time high and the price objective of $42.00 would be in play.
Bottom Line on SYMC Stock
I have been long awaiting a resolution the the price pattern that has developed on the Symantec stock chart. The current consolidation wave will determine when this pattern could potentially be completed, and will dictate the next direction in SYMC stock.