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How PepsiCo, Skillz And Visa Stocks Are Reacting To This Power Pattern

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·2 min read
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PepsiCo, Inc (NASDAQ: PEP), Skillz, Inc (NYSE: SKLZ) and Visa, Inc (NYSE: V) have recently been trading in descending channel patterns on the daily chart, making lower lows and lower highs between two parallel trendlines. The pattern is bearish for the short term but can be bullish down the road.

  • For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downwards. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.

  • Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.

See Also: Guggenheim Sees 14% Upside In PepsiCo - Read Why

The PepsiCo Chart: PepsiCo attempted to break up bullishly from the descending channel on Thursday but rejected and wicked from the upper descending trendline. Bullish traders may want to watch for PepsiCo to pop up above the pattern before taking an entry in the stock. For bearish traders the entry was on the rejection of the upper trendline.

pep_sept._23.png
pep_sept._23.png

The Skilz Chart: Skillz broke up bullishly from the descending trendline on Tuesday and on Wednesday the stock was consolidating the move. Bullish traders can watch for Skillz's stock to make a higher low for an entry or take a position if the stock backtests and holds above the upper trendline. Bearish traders could wait for an entry if Skilz reaches and rejects an upper resistance level at $12.50.

sklz_sept._23.png
sklz_sept._23.png

The Visa Chart: Visa broke up bullishly from the descending channel on Thursday and ran more than 2% higher, which confirmed a trend change. Bullish traders may watch for a period of consolidation as an entry point. Bearish traders could watch to see if Visa rejects from an upper resistance level at $230.19.

v_sept._23.png
v_sept._23.png

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