This is a very bullish set up. Why?
The descending wedge pattern is currently within a confirmed larger downtrend channel, and the descending wedge is getting into the 65% to 70% zone of completion of its pattern. This is a very bullish set-up for a bounce or break-out to the upside. We are seeing the stochastics coiling up here, and we are seeing divergence within the stochastic rotation -- both are bullish indicators that the stock can be putting in the bottom and having a change of trend. We have multiple touches of the stock on the larger downtrend channel, confirming its downtrend, and we are also seeing multiple touches of the descending wedge pattern, therefore confirming that pattern as well.
If you take a look at the weekly and monthly charts on POT, the stochastics are in an oversold range, and they are hitting the lower trendline support levels. I have scaled into this stock trade with an average of 42.16. The AH price action is 43.76, and I am looking for $44.50 as an exit, but as always, I might have to lock in profits before $44.50 because of news. Traders must always remember that they can "buy back in" and "lock in those profits."
