Don't Ignore This Chart!

PayChex Looks to Hit Payday with Momentum Breakout


PayChex (PAYX), which has nothing to do with Chex cereal, ended its correction with a three-day surge and wedge breakout. First and foremost, the long-term trend is up as the stock broke out in early October and hit a 52-week high in December. The stock was quite extended after 30% advance and then took a breather with the wedge pullback. 

A small wedge after a sharp advance is a correction and this makes it a bullish continuation pattern. Notice how the stock bounced off the rising 50-day SMA last week and continued with the wedge breakout this week. This means the uptrend is resuming and I would expect new highs in the coming days. The indicator window shows the Commodity Channel Index (CCI) dipping into oversold territory twice and then exceeding the intermittent high for a momentum breakout. 

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

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
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus