It is interesting to see a stock respecting its moving average support and resistance lines.
Suspense is built into the chart when the support and resistance lines converge because we know that one of the lines will eventually break.
At the end of last year we wrote about a ‘Bermuda triangle’ formation observed TGT’s weekly chart.
In the 3 weeks that passed since, TGT kept trading right into the formation:
Zooming in:
4 lines close in on TGT:
From below:
- The 351-week EMA body support line
- The 364-week EMA wick support line
From above:
- The 40-week SMA body resistance line (took over the 35-week SMA a week ago)
- The 43-week SMA wick resistance line
One of these lines sets will break soon. The question is – which one?