NYSE:SHW   Sherwin-Williams Company (The)
SHW is showing every sign of impending reversal it can while still maintaining its upward price channel . Even with yesterday's (1/3/22) sharp price decline, today it found support at the bottom of the channel.

The expected move the options are pricing in for the Jan 21, 2022 expiration date is about ∓ 3% shown as a yellow triangle here. Statistically; however, the expected move only has a 68.2% chance of being correct.

There are only 3 paths I see SHW taking in the next month:

1. Throughout the year SHW has tended to grow by about 30% and cool off by 10% and repeat, if that happened here then we should see the price follow the green arrow and usually take a meandering path to do so.

2. If the max pain price is correct then by Jan 21st, we should have a full correction, which some think SHW is overdue for, down to $290, following the white arrow.

3. And if the bounce off of support holds throughout this week, then we should expect the top of the channel to be tested again along with a new ATH following the purple arrow.

At the moment, I don't have any money in SHW because it's on a knife's edge. If we follow purple and top the channel I'll be buying Feb puts and if we have a close this week below the channel support (which also needs to break the RSI wedge ), then I'll also buy Feb puts.

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