|NTRS Daily Chart|
Starting with the flagpole, we will use 76.4% of the height of our pole as the measure for our price target. Using this standard, the target for our pennant in an upward breakout is 88.71. If, however, the pattern fails and breaks out to the downside, we will use the first major support line at 75.84 as our target. Remember, at this point we don't know which way this pattern will break, although the volume signature at present is pointing us towards an upside breakout.
Our Elliott Wave analysis also points towards a fifth wave upward breakout with a target of 90.29. Now, that target would take about two months to play out and would likely be a five sub-wave pattern itself, so while we're using it to confirm the potential strength of an upward breakout, the time horizon is too long for our preferred holding period of under a week. Rather, we'll stick to the pennant targets since we can anticipate a swift short-term spike towards either of our targets.
Looking at key dates for this stock, we can ignore earnings within our holding period. They next report on January 18th and we'll be out of any position long before then. The other key date, however, does impact the analysis, however. NTRS goes ex-dividend tomorrow (November 30th) with a $0.38 dividend. For you dividend players, that means you need to own the stock at the close today, and the pay-date for this dividend is January 1, 2017. It's important to factor in that dividend in our chart analysis, however, since those 38 cents will be taken off the stock price tomorrow at the open.
Here's how we're playing this stock:
- On a break to the upside, we will go long, setting a price target of 88.71. Our stop will be just below the low of the pattern.
- On a break to the downside, we will go short, setting a price target of 75.84. Our stop will be just above the high of the pattern.
- In both cases, "a break" indicates a close either above or below the pattern with volume that confirms the move.
- Also in both cases, we will trail our stops seeking first to reduce and then to eliminate risk.