Don't Ignore This Chart

PPO Upturn Points to a Correction-ending Breakout for Textron

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Textron (TXT), which is part of the industrials sector and the defense-aerospace industry, surged to new highs after the election and then declined in 2017. I consider this a correction within a bigger uptrend because the decline retraced less than 50% of the prior advance and the stock remains above the rising 40-week EMA. A channel formed over the last few months to define the immediate downtrend. A break above channel resistance would signal an end to the correction and a resumption of the bigger uptrend. Signs of an upturn are already emerging as the PPO (5,30,5) turned up and crossed above its signal line for the first time this year. 

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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