Evoqua Water Technologies (AQUA) Confirms The Top

Evoqua Water Technologies Corp. is a holding company, which engages in the provision of water treatment solutions. It operates through the Integrated Solutions and Services and Applied Product Technologies segments. 

Take a look at the 1-year chart of Evoqua (NYSE: AQUA) below with added notations…

Chart of AQUA provided by TradingView

AQUA has formed a bearish chart pattern known as a double top. Double tops are reversal patterns and are as simple as they sound: Rallying up to a point, selling off to support, rallying back up again to approximately the same top, and falling back down again. 

As with any price pattern, a confirmation of the pattern is needed. AQUA confirmed its pattern by breaking the $37 support (yellow) created by the double top pattern. 

The Tale of the Tape: AQUA confirmed a double top. A short trade could be made on any rallies up to the $37 level. A long trade could also be made on a break back above the $37 level.

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!

Good luck!

Christian Tharp, CMT 

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