Exelon Complex Inverted H&S Pattern

NASDAQ:EXC   Exelon Corporation
Exelon is seeing gains with the energy sector as oil moves higher this week. Price has formed a complex inverted H&S pattern with price recently coming up off a second right shoulder and is currently testing the neckline. Price is currently trading above all MAs(8,21,34,50,100,200) and the shorter MA's are crossing above the longer MAs indicating a shift to bullish price trend.

The lower PPO indicator is showing the green PPO line rising above the purple signal line which is also rising, and indicates short-term bullish momentum. Both lines trending above the 0 level indicates intermediate to long-term bullish momentum.

The lower TDI indicator shows a rising green RSI line which just recently crossed above the 60 level and indicates a short-term bullish trend. The green RSI line is above the purple signal line and is currently trading outside of the upper Bollinger Band which is a bullish signal and you want to stay long while the RSI line is above the upper Bollinger Band... but caution is warranted because price tends to correct after the RSI falls back below the upper band.

Should price break up above the neckline it would be bullish going forward and start to validate the complex inverted H&S pattern. At current levels we'd be watching for a close and open above the neckline around the $43 area. Taking a measured move from the head to neckline we get $11. This $11 would then be added to breakout level of $43 which gives us a projected price target near $44.

My buy price on this trade is $42.17.
My stop-loss is currently set at $39.55.
Risk/loss on the trade is roughly -4%.
Potential gain is roughly +22%.


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