RUM - Two Technical Patterns Warrant Attention
Larger Pattern - Triangle and Upside Risk
RUM
In the making now for 5-6 months. Projects to ~$14.50 on a bullish resolution but would need to give it up to 6 months to achieve that level. Assuming this target is achieved then the overall downtrend line originating from the all-time high becomes the next technical target which is above $15 and declining at the current time.
Smaller Pattern - Pennant and Upside Risk
In the making for approximately a month. Projects to ~$11.80 on bullish resolution in 3 - 5 weeks.
Confirmation
Look for a close and a sustained move above $10.30 on higher volume. This area represents the upper resistance for essentially both patterns at roughly this point in time and a move above this area would represent a bullish resolution to both patterns. Targets noted assume bullish resolution in the short-term.
Downside Risk
Failure of smaller pattern points to the lower trendline of the larger pattern. Failure of the smaller pattern can also indicate an enlargement of the pennant but would arguably weaken the potential. At prima facie a break below the pennant would be bearish. Below that look for support areas indicated. Failure of the smaller pattern would reduce the bullishness overall but could have the larger pattern remain in play as a potential.
RUM
In the making now for 5-6 months. Projects to ~$14.50 on a bullish resolution but would need to give it up to 6 months to achieve that level. Assuming this target is achieved then the overall downtrend line originating from the all-time high becomes the next technical target which is above $15 and declining at the current time.
Smaller Pattern - Pennant and Upside Risk
In the making for approximately a month. Projects to ~$11.80 on bullish resolution in 3 - 5 weeks.
Confirmation
Look for a close and a sustained move above $10.30 on higher volume. This area represents the upper resistance for essentially both patterns at roughly this point in time and a move above this area would represent a bullish resolution to both patterns. Targets noted assume bullish resolution in the short-term.
Downside Risk
Failure of smaller pattern points to the lower trendline of the larger pattern. Failure of the smaller pattern can also indicate an enlargement of the pennant but would arguably weaken the potential. At prima facie a break below the pennant would be bearish. Below that look for support areas indicated. Failure of the smaller pattern would reduce the bullishness overall but could have the larger pattern remain in play as a potential.
Trade active:
My original post was made when the stock was trading at roughly 10.00-10.05. While I have been following these patterns for a while I was not really expecting the potential move to happen literally after this post. With the close above $10.30 this potential move is now actionable. Close above $10.30 on good volume. Pick your entry and risk exit as you may be so inclined. Will no doubt be volatile in here but will be looking for a continued sustained move above $10.30.