Don't Ignore This Chart!

Ross Stores Stalls after Breakout


Ross Stores was hit hard with a high volume gap down in late May, but immediately firmed and recovered. The stock broke out of a long triangle in early June and then stalled with a small flag last week. Basically, we have two bullish continuation patterns at work.  

The long-term trend is up because the 50-day EMA is above the 200-day EMA and the stock recorded a 52-week high last Monday.

With the long-term trend up, the long triangle consolidation is considered a bullish continuation pattern. The breakout, therefore, signals an end to this rest period and a resumption of the bigger uptrend.

The breakout surge was over 10% and the stock corrected a little last week with a falling flag. These are short-term bullish continuation patterns and a breakout would open the door to new highs in the stock.

The indicator windows shows OBV hitting a new high in June as up volume outpaces downside volume. The new high in OBV is especially impressive after the high-volume gap down in late May. ROST recovered quickly by filling the gap with a steady advance.

- 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
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