In the Spotlight — VMED

Over the last month or so,Virgin Media (VMED) has been benignly trading sideways after breaking out of a nice cup and handle formation that had developed from November of 2011 through the first couple of months of 2012.  While it has had trouble getting over its 200 day moving average, it has done so constructively with price action holding in a stable manner as volatility and volume slowly contract in anticipation of an imminent move.  Contrast this behavior to the last time VMED met the critical long term moving average when it dropped precipitously and ultimate lost about a quarter of its value.

This time around, VMED has stayed close to it rising 20 period moving average and has remained in a fairly tight wedge pattern as it consolidates just under this important measuring stick.  Price action is nearing the apex of this wedge and a resolution to this range should come in the next few days.  Keep an eye out for expanding range with a sharp increase in volume to signal a high percentage entry.  A logical stop out point for a long trade would be some where below its most recent attempt at filling its gap in the mid to low $24 range while a break above its 200 day average will likely result in a retest of the last failure around $28.

 

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Posted in Charting & Analysis, Charts, Commentary, General Trading, Stocks, Watchlist