Ann Inc. Ready for Action

A clearly defined trendline and a divergence between technical indicators and price can be a profitable trading combination, and the daily chart of women's apparel retailer Ann Inc. (ANN) contains both these actionable components.

Ann Inc. (ANN) Source: StockCharts.comA View Chart » View in New Window »

The stock has been in orderly decline for the last four months, making a series of lower highs and lower lows, with the 50-day moving average reinforcing the well-defined downtrend line. While this resistance line remains intact, the December lows held the November low and defined support near the $31.75 level. This price action resembles a triple-bottom formation just above the key 200-day moving average. The dashed line that runs down the middle of the channel is a linear regression line or the best-fit-straight line of price. It is the basis for the slope indicator, which measures the price rise or fall relative to the regression line over a time period. A slope indication above its zero line suggests an uptrend and below zero suggests a downtrend. On this chart, slope is moving above its centerline and, while the trend has not reversed, the divergence between price and indicator reflects trend weakness....132 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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