MMR McMoRan Exploration (NYSE) Bullish Ascending Triangle – Technical Breakout Imminent

by Olivier on February 25, 2010

McMoRan – MMR my recent portfolio addition is starting to look very bullish. In my book it looks like we are about to witness a break-out to the upside. I described what I was looking for, why I was patient with MMR and what made me think the trade has great odds of working. I added a bit to my position today. A few reasons why I am bullish on the stock:

  • After my entry the stock dipped but the very next day the stock went up. Great trades work right away the saying goes.
  • The stock is behaving exactly like I expected it to behave. That is always a very bullish sign.
  • The day after I entered news of significant insider buying was published.
  • Picture perfect ascending triangle. We are about 2/3 into the pattern. That’s where the best breakouts occur.
  • The stock closed near the high of the day.

Some characteristics and charts patterns I am typically looking for:

  1. Rather long base.
  2. Game changing news / fundamentals.
  3. Abnormal volume surge.
  4. Gap up.
  5. Thrusting move.
  6. Consolidation pattern. Preferably an ascending triangle.
  7. Story stock potential.
  8. Potential to attract the momentum trader crowd.
  9. Market capitalization that leaves a lot of room for additional price appreciation.

MMR – McMoRan Exploration (NYSE) is displaying all those characteristics. It looks like trading above 17$ US Dollar will trigger stop buys. If the stock can break out, momentum traders will take notice and a whole new group of traders generating additional buying pressure will enter the scene. Let’s see what happens.

MMR McMoRan Exploration NYSE Ascending Triangle Breakout Technical Analysis Price Chart

Up-to-date MMR McMoRan Exploration Chart on my public list.

You will notice I used the words: ‘Act accordingly’ in the chart annotations. I don’t do this very often. Relax, hold on to your position and be patient with your winners.

What you are afraid to do is a clear indicator of what you need to do.

Have a great evening!

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