SubscribeMomentum Stock: American Ecology (ECOL:NASDAQ)
American Ecology Corp (ECOL:NASDAQ) has seen its fair share of price swings over the past two years. However, when I applied an upper resistance line and a lower support, it was discovered that we have a symmetrical triangle pattern.
It is important to note that you should never trade the stock inside the triangle with the assumption that the breakout will eventually assume the trend prior to this particular pattern.
Instead, trade in the direction of the breakout. In this case the breakout was to the upside — as noted by the green arrow on the chart. Additionally, we have a buy signal on the Moving Average Convergence Divergence (MACD) indicator.
We may move sideways for a candlestick or two, but eventually another pop will occur and send shares into the stratosphere.
Our recommendation: Buy shares of ECOL at or near $23.42. Place a 5% stop loss below your purchase price.
Good investing…
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