Summary: Visa’s chart is signaling a change in character. It may set up a long opportunity in the next few days, but that’s a low quality entry.
So many stocks are at great longer term buy points this week. One of the most notable names that aren’t is Visa.
Over the past two weeks, Visa relative to the S&P 500 has fallen sharply. This means Visa is notably underperforming the average large cap stock.
Structurally, there is a failed cup and handle pattern. The handle was shallow and flawed. This suggests buyers were just too eager. When buyers are too eager, they get flushed out. We can expect a move back to the low end of the range between 66-70 as shares flush out those eager bulls.
This target area is reinforced by the M top formed by the flawed handle measuring down to ~70.
Flawed structures are something I stay away from as an investor. It suggests something is very wrong with the stock(we don’t need to know what it is). It’s very possible that 80 level becomes a multi year high.
Thanks for reading!