5 Stocks to Trade for Breakout Gains
FXE is currently forming a descending triangle pattern, with horizontal support at $129.50 and downtrending resistance acting as a sort of ceiling for shares. Essentially, as FXE bounces in between those two technical price levels, it's getting squeezed closer and closer to a breakdown below that support level at $129.50. When that happens, traders have a signal to bet against this fund.
The next-lowest support level in FXE is $126, a price that acted as a floor for units back at the start of the year. That price provides a good preliminary target when and if $129.50 gets broken to the downside. If you do decide to take this trade, I'd recommend keeping a protective stop just above the 50-day moving average.
To see these plays in action, check out the Technical Setups for the Week portfolio at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.