Under Armour UA Breakouts and Reversals into June

Under Armor topped our stock scanning list this morning, and I wanted to expand on the analysis with a discussion – and trade planning – from the Weekly and Daily perspective.

We’ll start with the weekly chart structure and trend:

The trend remains bullish to the upside as evidenced by higher price lows and higher price highs along with a bullish moving average structure.

Price recently rallied sharply off the $45.00 per share price and rising 50 day EMA confluence – we also can see a positive momentum divergence into this level on the daily chart.

For now, price has entered “Open Air” and continues the longer-term uptrend which will again be confirmed above $55.00 per share (should buyers break this target level as well).

Let’s take a moment to focus on the $55.00 per share key level at the moment:

I wanted to comment first on the positive Momentum Divergence going into the mid-May Low (at the same level as the rising 50 week EMA mentioned above) as a catalyst for an aggressive reversal trade set-up and lesson.

Aggressive traders look to buy into support – especially if reversal candles and positive momentum divergences are present – and trade the rally up off support.

Conservative traders look to establish – or add to existing positions – on confirmed breakouts above reversal candle highs or falling EMAs as I’ve highlighted above.

Price propelled higher over the last few sessions including today AFTER breaking above the falling 50 day EMA and $50.00 per share “round number” reference.

Now, we have price trading into the $55.00 per share price (two swing highs) resistance reference target which will be our focal point for taking profits on any sell-swing against this level… or else a fresh breakout buy catalyst for more upside price action through “Open Air” above $55.00 per share.

The next target could take price higher toward $60.00.

Use these reference levels – and the “Higher Frame Support plus Lower Frame Divergence” example as educational lessons of trading tactics using two timeframes (into a bullish trend).

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).