Don't Ignore This Chart!

Viacom Makes a Move with Big Volume


Viacom (VIAB) is part of the broadcasting-entertainment industry group, which is part of the Communication Services SPDR (XLC). The stock acted more like a defensive share in the first half of the year by underperforming from January to May. VIAB bottomed in June and outperformed the broader market over the last five months.

On the price chart below, we can see VIA correcting after a big surge from November to January. The correction formed a falling channel/wedge as the stock retraced 61.8% of the prior gain. A 1/2 to 2/3 retracement is fairly normal for a correction within a bigger uptrend.

The correction ended with a higher low in July and breakout in late August. The stock forged another higher high in late September, and then fell back to the 200-day SMA. The stock still has a progression of higher lows in place and the trend is up.

VIA caught my eye because it surged with big volume on Friday. This move reinforces support in the 30-31 area and argues for a continuation of the existing uptrend. Failure to hold the 200-day and a close below 30 would call for a reassessment.  

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
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