This Financial Stock’s Rally Is Fighting for a Third Leg

[Trading With Larry Benedict]( This Financial Stock’s Rally Is Fighting for a Third Leg By Larry Benedict, editor, Trading With Larry Benedict The past six months have handed shareholders in Visa (V) some great gains. Recently, the card payment services provider’s share price has gained over 25% from late October to its February high. It has even overtaken JPMorgan (JPM), with its market cap soaring well past half a trillion U.S. dollars. After hitting its all-time high on February 28, though, Visa pulled back due to declining momentum. So today, I want to check Visa’s chart to see where things might be heading from here… A Strong Second Leg The chart of Visa below shows a classic uptrend in action. From March to April last year, VISA slowly ground higher. A pullback and period of consolidation followed (typical in longer-term rallies). Then Visa resumed its uptrend in October. The 50-day Moving Average (MA, blue line) below highlights this trend… Visa (V) Source: e-Signal [(Click here to expand image)]( The 10-day MA (red line) crossed the 50-day MA back and forth in the first stage of Visa’s rally (and through its consolidation phase). Yet the rally’s second leg that kicked off in late October showed more consistent strength. During the second leg, the 10-day MA crossed above the 50-day MA. It then continued to accelerate higher, dragging the 50-day MA up at a much steeper angle than during the first leg. The other difference between these two legs is the action of our momentum indicator, the Relative Strength Index (RSI). In the first leg, the RSI stayed in the upper half of its range most of its time (above the green line). But it still tested and fell through support multiple times. This highlighted a lack of ongoing conviction from buyers. But in the second leg of Visa’s rally, the RSI stayed in its upper range throughout the entirety of the move. Take another look: Visa (V) Source: e-Signal [(Click here to expand image)]( Yet while Visa’s stock price was climbing up to its peak in February (upper orange line), the RSI showed momentum was declining from overbought territory (lower orange line). When the RSI is falling like this despite a climbing stock price, a correction is often in the cards. And that is what we saw. But after slipping down, Visa’s pullback petered out just over a week ago. The RSI retested and held support. So what am I looking for next? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Maintaining Momentum One of the major signals I watch is momentum (RSI). The RSI held support yet again. So I’ll be looking for it to remain in the upper half of its range for Visa to continue its rally. The next test for Visa is to take out its February 28 high ($286.13). I’ll also keep tabs on the MACD. As the chart shows, since February, it has been meandering lower. The blue MACD line recently fell below the orange Signal line (red circle). If the MACD can break back above the Signal line and accelerate higher, that will give further evidence that Visa’s rally is resuming. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](