Schwab (NYSE:SCHW) has been hemmed in by the post Motif deal breakdown gap left behind back on June 24th. This key zone ($36.00) held the multi-week July highs as well as the early August peak. SCHW is bumping up against this area again this week as a solid basing pattern continues to develop.
SCHW Daily Chart
Shortly after the post Motif deal, the sell off of SCHW began to base in a narrowing range. A second straight higher monthly low is in place while the stock remains well below overbought levels (daily MACD).
Initial target is the declining 200 day moving average ($39.75). We believe a clear take out of the $36.00 area could have sparked a fresh rally leg, however, yesterday’s close was $35.71, falling short, but still above this week’s low of $34.25.
Long SCHW in some managed accounts.
Schwab Stock: What To Watch
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