Don't Ignore This Chart!

The Noose Tightens on Monsanto


Monsanto (MON) could be poised for a volatility expansion because BandWidth has narrowed over the last few weeks and volatility has contracted signficantly. The BandWidth indicator tells us that the difference between the upper and lower Bollinger Bands is less than 4%, which is relatively low. John Bollinger theorized that a volatility expansion follows such a contraction, but this contraction does not give us a directional bias. The chart sports a diamond consolidation over the last few months and chartists can watch this consolidation for a breakout to get a jump on the next directional move. 

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Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at 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 market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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