Stock Chart Analysis DISCA

Stock Chart Analysis DISCA

Discovery Holding Company (Public, NASDAQ:DISCA)

While I'm not convinced the markets are ready to break down on another new leg down, it is fairly obvious we are in a bear market and the path of least resistance is down. DISCA is a stock that may be a little extended to the downside for a new short position, but overall the large topping pattern looks very promising. While this is not a text book head and shoulders, the general pattern is one of a stock that breaking under a large congestion area. Typically, these patterns lead to lower prices as the majority of the trading volume (along with the traders) is underwater after an extended period and supply begins to overwhelm demand. I would look for DISCA to trade back up to the neckline area in the next few sessions where sellers will be waiting to ease their pain.


Good Trading,


Joey

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