SYMC Stock: A Perfect Springboard
At the end of January, the market indices swooned. The catalysts that sent them lower ranged from higher interest rates to a spike in the volatility index, which created a lot of confusion. One thing that remained clear was that the sell-off was driven by computers acting on algorithms.
The fact that computers have such an influence on the stock market is especially frightening, given that cybercrime and threats are high and rising. Centralized systems have been the cause of many hacks and a countless amount of personal data has been stolen.
It’s easy to see why cybersecurity is a hot topic and why tens of millions of dollars are flooding into this sector as companies continue to take steps to secure their networks. This topic of cybersecurity is why I am currently focusing on Symantec Corporation (NASDAQ:SYMC) stock, which is a leading global cybersecurity solution provider.
I like this company for many reasons, but the main reason why I am focusing on Symantec stock as an investment is because I believe it is currently in the perfect spot to stage a significant move toward higher prices.
This inclination toward higher SYMC stock prices is technical in nature and, therefore, these beliefs are strictly based off the price action on the Symantec stock chart.
The following stock chart illustrates a compilation of indications currently suggesting that SYMC stock is currently poised to make a move toward higher prices.
Chart courtesy of StockCharts.com
There is a lot of information contained on this SYMC stock chart, so let’s begin with the rounded bottom that was in development for 12 years.
A rounded bottom is a technical price pattern that captures the slow progression of a stock transitioning from a bearish trend into a bullish one. This slow progression is what creates the rounded bottom, which has been highlighted on the Symantec stock chart.
This pattern began in December 2004 and was completed in January 2017, when the significant level of price resistance marked by the previous all-time high, which resided at $25.00, was finally overcome. This is a very large technical pattern and the implications of this completed pattern are directly correlated by its size, suggesting that much higher prices are on the horizon
The great thing about this pattern is that it can be used to create a price objective once it is complete. This price object is created by taking the depth of the pattern and extrapolating that value above the previous all-time high. This produces a price objective of $42.00. I have reason to believe that much higher prices are likely to be achieved beyond this price objective.
This notion of higher SYMC stock prices is being reinforced by the dynamic that is created when a previous all-time high is overcome. Everyone and anyone who is long on the stock is sitting with an investment in profit territory, while everyone and anyone who is short on the stock is sitting with an investment in loss territory.
Add in the notion that new all-time highs have a tendency to attract momentum investors, and an environment is created where demand for stock outstrips the supply available. Incredible runs toward higher prices develop as a result. This is why, when a long-standing high is overcome, it is a very bullish indication.
Since breaking out, Symantec stock staged an advance that reached a height of $34.11 before petering out. The recent market slide has caused Symantec to return and retest the previous all-time high from above. This type of price action is actually very common; it is called a backtest and it serves to reaffirm that the break above the previous all-time highs was legitimate, while simultaneously establishing this price point as a new significant level of price support.
A successful backtest would imply that higher Symantec stock prices are likely to prevail. I would be anticipating that, at the very least, the linear price objective of $42.00 will be met and that much higher Symantec stock prices will follow beyond that.
A failed backtest, on the other hand, would involve SYMC stock trading back below the previous all-time high and it would negate all the bullish implications suggested by it.
Symantec stock is currently backtesting its previous all-time high and successfully maintaining its footing above it will imply that much higher SYMC stock prices are likely on the horizon.