Breakout traders love tight consolidation.
What does that mean?
It’s when a stock goes sideways in a very tight channel.
Anytime a stock does that, it’s a harbinger of things to come.
Many times a big breakout will happen after this type of action, and many times that breakout will be to the upside.
And we have such a consolidation on Chubb (CB).
Here’s the chart:
CB is above the 30-week moving average, and it’s near a new high.
A bullish market and a breakout above $230.40 could lead to a big move.
We’ll keep an eye on it.
Happy trading,
— Scott Welsh
P.S. As a reminder, these plays are based on my longer-term Weinstein Stage Analysis method. The chart above uses weekly candles and a 30 week simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.
