This Is All That Stands in the Way of Higher TTMI Stock Prices

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TTMI Stock: This Level of Resistance Is Significant on Many Levels

The current market environment is not the least bit bearish, which is why the major market indices continue to drive toward higher index values.

I am delighted to be focusing on TTM Technologies, Inc. (NASDAQ:TTMI) stock because it is currently testing a very significant level of price resistance.

I believe that this level of price resistance is all that is holding TTM Technologies back from higher stock prices. It is why I also believe that when the stock price is finally able to overcome this hurdle, it will set off a flurry of buying pressure that will fuel a move toward much higher TTMI stock prices.

My beliefs are all technical in nature. Therefore, they are all based on the price action and signals that were generated on the TTMI stock chart.

The following TTM Technologies stock chart illustrates a wave structure and an influential momentum indicator that have come into alignment, suggesting that TTMI stock is poised to make a move.

Chart courtesy of StockCharts.com

This TTMI stock chart captures the wave structure and influential momentum indicator currently suggesting that TTM Technologies stock is poised to make a move.

The wave structure consists of an impulse wave and a consolidation wave.

The impulse wave is highlighted in green. It defines the period in a bullish trend when a stock sustains a progressive move toward higher stock prices.

The consolidation wave is highlighted in purple. It defines the period in a bullish trend when the stock price corrects and refrains from advancing.

TTMI stock is currently within a consolidation wave. These waves are very important in the development of a bullish trend because they create the necessary conditions so an advancing impulse wave can follow.

In order to suggest that an advancing impulse wave is in development, TTMI stock needs to break above $20.00 on a sustained basis. This price point is a very significant level of price resistance that will be revisited later on.

Once resistance is actually broken, an impulse wave will follow and it will be confirmed by the moving average convergence/divergence (MACD) indicator.

MACD is a trend-following momentum indicator that distinguishes whether bullish or bearish momentum is influencing the trading action in a stock. Bullish momentum implies that a stock is geared toward higher prices, while bearish momentum implies that a stock is geared toward lower prices.

Momentum is a powerful force because a sustained move in either direction cannot occur unless the applicable level of momentum is supporting it. This is why the waves within this wave structure have been accompanied by signals generated by the MACD indicator.

For example, a bullish MACD signal has coincided with the development of an impulse wave. Similarly, a bearish MACD signal has coincided with the development of a consolidation wave. This correlation is strong and there is nothing to suggest that it is going to end any time soon.

Currently, the MACD signal lines have converged and a bullish MACD cross is likely going to be generated in the weeks ahead. When this signal is generated, it will suggest that a sustained move toward higher prices, via an impulse wave, is likely to follow.

The development of an impulse wave will result in a break above resistance, which resides at $20.00. Such a development would be very significant because it will also complete the technical price pattern captured on the following TTM Technologies stock chart.

Chart courtesy of StockCharts.com

This TTMI stock chart highlights a “cup and handle” price pattern.

Cup and handle price patterns are created because a significant level of price resistance prevents the stock price from advancing beyond it. This is the same level of price resistance that defined the consolidation wave, which is currently still in development.

The stock’s inability to move beyond this price point is why the price action created two very large and distinct troughs. These troughs are what characterize a cup and handle price pattern.

When identifying a cup and handle price pattern, the first trough is always much bigger than the second. The cup and handle price pattern captured on the TTMI stock chart fits the bill perfectly.

Breaking above resistance, which resides at $20.00, will complete the pattern, suggesting that higher TTM Technologies stock prices are likely to follow.

The great thing about this pattern is that it not only implies a bullish outcome, but it is also nice enough to provide a much-needed price objective.

This price objective is obtained by taking the depth of the cup and extrapolating that value above the significant level of price resistance that defined the pattern. Putting this method to work suggests that once resistance is finally broken, $35.00 is going to be a viable price objective. This leaves a considerable amount of upside potential.

Breaking above this level of price resistance is not going to be easy, because this level of price resistance has been around for a very long time.

The following TTM Technologies stock chart captures this phenomenon.

Chart courtesy of StockCharts.com

This TTMI stock chart illustrates that the significant level of price resistance, which resides at $20.00 and was first established in January 2004, has prevented all attempts to move beyond it.

The implications of a successful break above resistance are magnified because this level of price resistance has stood the test of time for 18-and-a-half years. This not only reinforces that $35.00 is a viable price objective, but it may also suggest that this target may only end up being an initial target.

The reason being that once a long-standing level of price resistance is broken, there is no saying how high the price can travel. TTM Technologies stock would be free to appreciate, suggesting that overshooting the $35.00 price objective suggested by the cup and handle price pattern is not only possible but also probable at the same time.

Analyst Take

I am watching a significant level of price resistance, which resides at $20.00. The reason why is that I believe that when TTM Technologies stock is able to break above it, it will open the door for much higher TTMI stock prices to follow.