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

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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