Don't Ignore This Chart!

Classic Ascending Triangle Breakout On This Software Stock

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Imperva Inc (IMPV) made a steady move higher from April through July before consolidating in a very bullish ascending triangle continuation pattern over the past four months.  On Tuesday, volume accelerated and triangle resistance near 74.00 was cleared as IMPV extends its prior uptrend.  The measurement of this pattern is from the bottom of the triangle in late August (53.00) to the top of the triangle (74.00), or 21 points.  Once we see the breakout on heavy volume, the target becomes the breakout level (74.00) plus the measurement (21 points), or 95.00.  Best entry on a breakout of this nature is during a retest of prior price resistance (now price support) near 74.00 with a potential second entry at the rising 20 day EMA, currently 71.59.  Recent November lows would serve as key price support to watch in the near-term.  Here's the chart:


Happy Thanksgiving and happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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