Accenture plc provides management consulting, technology, and outsourcing services worldwide. Its Communications, Media & Technology segment provides professional services that help clients accelerate and deliver digital transformation. The company’s Financial Services segment offers services that help clients enhance cost efficiency, grow their customer base, manage risk, and transform their operations. Its Health & Public Service segment provides research-based insights and offerings, including digital solutions to help clients deliver better social, economic, and health outcomes. Its Products segment helps clients enhance their performance in distribution, sales, and marketing; in research and development, and manufacturing. Its Resources segment enables clients to develop and implement new business strategies, improve operations, manage complex change initiatives, and integrate digital technologies.
Take a look at the 1-year chart of Accenture (NYSE: ACN) below with my added notations:
ACN has formed a relatively clear up-channel chart pattern over the last 2 months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that ACN has 4 different points of channel resistance (red) or support (green).
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The Tale of the Tape: ACN has formed an up-channel. A long trade could be entered on a pullback down to the channel support, which currently sits near $113. Short opportunities would be on rallies up to channel resistance or on a break of channel support.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach