Here is breakout idea, that will require possibly holding a long position for the longer term.
This is potentially suitable for traders looking to "re-invest" their shorter term trading profits.
1 MDT has been trending extremely well, since June 2013 to Feb 2015.
Over a period of about 33 months, price has channeled upwards, from around $38 to $79 on Feb 2015, returning an impressive 115% gain.
2 Of course nothing lasts forever and we see a consolidation phase, where price retraces aggressively to around 64 (-18%), before trading back to $78 levels on Apr 2016.
Please note that this is not a . To be honest I am not sure what fancy cute name to call this formation.
What I do know that this is a clear consolidation pattern, with a sharp rejection of $64,00, subsequent support buying above $72.00 and price is already trading above the .
Price is already breaking out an is likely to trade higher.
It is likely that the breakout might repeat the price action in 1, in the form of a slow and steady channel up.
Therefore a long holding period is highly advised in order to capture the full potential of the move.
A long entry can be executed now, as long as price is no more than 81.50 and no cheaper than 78.50 and no later than 12 May 2016.
If price were to trade to the consolidation, then the breakout is no longer valid.
Looking at how price behaves in 1, I will prefer not to assign absolute profit targets and simply let the price run its due course.
In other words, a long holding period is advised, in order to capture a potential steady increase in price trend.
Method 1: Profit can be taken at around $92. which is a simple technical projection from the height of the consolidation zone in 2.
$100 is also another possible technical level to consider taking profit.
Method 2: Set up as shown, set a alarm to notify you when price breaches the line.
Close the position when the alarm goes off, as it indicates that the trend might be an end.
It might be a long wait so patience is highly advised.
Because this is a long term position, there's a risk that new fundamental information, especially releases, may negatively affect the price.
MDT has broken out of a 14 month consolidation zone and is looking to trend steadily higher over the long term.
Have a profitable day~
Even though price breakout for a while after the idea is posted, new fundamental development in Brexit has placed the bullish breakout in check.