The Stars Are Aligned For Constellation Brands
Dragonfly Capital | Nov 26, 2014 11:36PM ET
The constellation Orion, the Hunter, is in the night sky this time of year. It is easily recognized by the three stars making his belt. They line up with and point to Sirius, the Dog Star, his hunting companion. His knee is marked by Rigel and his left shoulder by Betelgeuse. Many also know that his sword, hanging from his belt, is comprised of a nebula. Orion is prepped to battle for victory against Taurus.
There were some crazy things that our ancestors saw in the stars as their brains sought to find patterns. We still look for patterns in life today. As a technical trader, I look for them in price charts. And one stock, Constellation Brands (NYSE:STZ) has a pattern setting up for victory higher.
This chart shows the weekly price action and several reasons why it may be ready to make an assault on $100. It is easy to see the rising trend since the stock price crossed the 50 week SMA in June 2012. It has touched that level twice since, most recently with the market low in mid October. Since that last touch it has been moving higher in a consolidation range that began in June this year.
It is now at the top of that range, and as it arrives the Bollinger® bands are opening higher to allow it continue to move up. The momentum indicators, RSI and MACD, are also showing strength. A push over 95 would trigger a buy signal and look for continuation of the trend higher. Perfect timing for a wines and spirits company as the world enters the holiday season. Why not bring a few shares to the host of your next party instead of a bottle of wine?
Disclosure: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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