A Trio of Tradable Patterns

The choppy sideways price action continues in the broad market -- and, as I mentioned in a Feb. 21 post, its resolution seems dependent on the integrity of the weekly regression line originating from the October 2012 low, and currently intersecting with the 1500 level on the S&P 500 Index. Individual stocks have also been going through various forms of consolidation, and three in particular have been moving in tight ranges after recent rallies, forming tradable patterns in the process.

Robert Half International (RHI) -- Daily Source: StockCharts.com View Chart » View in New Window »

Robert Half International (RHI) provides staffing and consulting services, and the stock has been moving sideways for the last month after a strong move off its October low. The recent price action included two bearish engulfing candles and the formation of a rudimentary head-and-shoulders topping pattern. Momentum and positive money flow have been waning, and the stock looks vulnerable. The Bollinger Band width indicator, at the bottom of the chart, is showing significant compression. This often precedes volatile price action. A measured move from a head-and-shoulders pattern breakdown would see the stock taking out the 50-day moving average, and would give us a target at the 38% retracement level of the previous rally....232 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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