With Magnificent 7 stocks in trouble this week and roughly 30% of S&P 500 stocks falling below their 50-day moving average in October, where can investors find emerging strength? Financials was October’s best-performing sector, and Visa (V)’s chart suggests the payments processor may be just getting started. Over the past eight months, Visa has been constructing a “cup-and-handle” pattern, which is formed by an oblong bottom pattern and a brief shallow pullback. This type of pattern typically occurs after a bullish phase and represents a prolonged period of consolidation before a new breakout signals a new bull trend. The key to this particular pattern is fairly stable resistance, which is evident on the Visa chart, with multiple tests of the $290 level since March 2024. An influx of buying has the potential to send prices sharply higher. That breakout finally happened this week, with a profit-fueled upside gap finally pushing V above the $290 threshold. The structure on the daily chart remains positive as long as Visa remains above the $290 price point, which is now potential support. Below that, we focus on the 50-day moving average, which is consistent with recent swing lows in September and October. Visa’s weekly chart shows that this week’s breakout is just the latest sign of a bullish follow-on trend for the stock. We observed a similar big bottom breakout back in November 2023, with V having a strong run in 2021 and rising an additional 18% in early 2024. The RSI remains above 40, indicating that the overall momentum picture remains bullish on the long-term framework. You may notice that the RSI behaved very differently in 2022, when Visa’s major downtrend caused the RSI to remain below 60 on the rebound. The bottom panel shows the weekly PPO, which generated a buy signal in late August 2024. As long as Visa remains above moving average support, the payments processor could see further gains in early 2025. Do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent company or affiliates, and may have been previously disseminated by them on television, radio, online or other media. The above is subject to our Terms and Conditions and Privacy Policy. This content is for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not apply to your particular situation. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. Click here to view the complete disclaimer.
While seven major stocks are struggling, this forgotten growth stock name is breaking out | Real Time Headlines
RELATED ARTICLES