£AZN 1-day classic patterns

xciiitradingco Updated   
Q: What has the highest probability of occurring?

After being one of the strongest performers in 2020 during the initial UK lockdown the stock lost over 30% of its value.

In 2021 it has staged a modest recovery but is still over 15% below its all time high requiring an over 20% rally.

There is well tested support at 8100p and resistance at 8775p.

There is 2 classic patterns 1 that has not validated. 1 that has validated.

The bull flag , with a breakout of 8775p, stop at 8100p, and projected target at 10150p. A risk-to-reward ratio of 2R.

The breakout from the bull flag needs to be confirmed by a close outwith both the flag and resistance. A difficult task therefore requiring more time to confirmation.

The double top , with a breakout of 8100p, and projected target at 7400p. Using a stop half the size of the range creates a 2R opportunity.

The stock also pays a 2.48% dividend semi-annually. Given the length of the setup this trade may run deep into 2022 to allow that dividend to be collected.

Although before that point there will be 2 earnings releases adding volatility to any potential positions held.

The short trade is therefore not of interest here however considering it has validated this may act as a catalyst for the long side. But again it is not yet validated.
Clear rejection at 8775 resistance.


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