UTX Chart Wonders

Feb 17, 2008: 4:22 PM CST

United Technologies (UTX), component of the Dow Jones Index, has recently ended a multi-year uptrend through some highly volatile downside price action. Let’s look at the history of this stock’s chart pattern through the last few years:

Monthly Chart:

While the monthly chart shows a magnificent uptrend since 1997, the recent action represents a mere pullback or correction against the strong, underlying trend. Price has found support at the rising 20 period moving average, yet time will tell if the bulls continue to hold this area as support.

Notice the textbook symmetrical triangle pattern which unfolded exactly as the classic textbooks project. Notice the measuring rule (price projection) that achieved its target perfectly following the breakout of the triangle consolidation zone (purple arrows).

The 20 period MA has served as support in the past and we’ll see if it happens again this time.

Onto the Weekly Chart:

Again, we see a strong uptrend in price, and support coming from both the 20 and 50 period moving average.

Currently, price is trapped beneath these key averages, and the weight of force seems to be pushing price downward, as price broke the 50 period average briefly. The averages themselves still remain in the most bullish orientation possible, but price has now broken into a confirmed downtrend on the weekly chart (with lower high and lower low, combined with two new momentum lows and moving average violations).

While the fundamentals may still remain strong, even stocks like United Technologies can’t always overcome the pressure of a falling overall stock market.

Keep your eye on this stock. If the uptrend resumes, we could see higher prices yet to come, but it seems likely that price will attempt a test of the rising 200 period moving average at some point, which would take price down to $60 or below before making a new run higher. Let’s see!

2 Comments

2 Responses to “UTX Chart Wonders”

  1. Stock Market » UTX Chart Wonders Says:

    […] Corey Rosenbloom wrote an interesting post today on UTX Chart WondersHere’s a quick excerptWhile the fundamentals may still remain strong, even stocks like United Technologies can’t always overcome the pressure of a falling overall stock market. Keep your eye on this stock. If the uptrend resumes, we could see higher prices … […]

  2. Trader Says:

    I believe the stock price right now is at the lower channel of a 5 year price chart. At 70 is a good buy cause it stand at the strong 5 yr support trendline.

    The secondary support will be at 65. If it breaks this, I think the bear must have wrestle over the bull.

    Good Luck!