The weekly and daily chart of Citrix Systems are aligned. On the daily chart, we have an 8-1/2 month box and a pattern of higher lows. The stock recently broke to new highs and successfully retested the top of the trading range as you can see in the chart below.
On the weekly chart, the stock has been going sideways since 2011. I’m always intrigued by bases because typically a prolonged period of contraction leads to an extended period of expansion.
Stan Weinstein, the author of Secrets For Profiting In Bull and Bear Markets, has a great definition the “basing area,” specifically the one’s that are formed after several down months.
The Basing Area: “After XYZ has been declining for several months, it eventually will lose downside momentum and start to trend sideways. What’s actually taking place is that buyers and sellers are starting to move into equilibrium, whereas previously the sellers were far stronger, which is why the stock had plummeted. Volume will usually lessen–dry up–as a base forms. But often volume will start to expand late stage 1, even though prices remain little changed. This is an indication that dumping of the stock by disgruntled owners is no longer driving down the price. The buyers who are moving in to take the stock off their hands are not demanding any significant price concession.”
Citrix has not been declining for several months. However, it looks like a brand new set of buyers are ready to take the stock higher.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at firstname.lastname@example.org or 646-480-7463.
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