One way to cut through the noise in the stock market is to focus on a dual-pronged technical strategy: first, identifying stocks that are in a solid, established uptrend, and second, waiting for a favorable entry point that minimizes immediate risk. This approach avoids chasing stocks after a big run-up and instead looks for a healthy consolidation pattern within a strong trend. By screening for stocks that score high on both technical health and setup quality, traders can find candidates that offer a more structured risk/reward profile.
Unum Group (NYSE:UNM) currently fits this profile well, registering a Technical Rating of 7 out of 10 and a Setup Rating of 8 out of 10. A full breakdown of these scores can be found in the ChartMill Technical report.
Technical Strength: A Solid Uptrend
The first pillar of this strategy is ensuring a stock is technically sound and moving in the right direction. A stock with a Technical Rating of 7 or higher is considered to be in an uptrend, making it a candidate for further gains. UNM's rating of 7 is supported by several positive factors.
The long-term trend remains positive, even though the short-term momentum has recently paused. All major moving averages—the 20-day, 50-day, 100-day, and 200-day Simple Moving Averages (SMAs)—are rising, which is a classic sign of a healthy, sustained uptrend. The stock is also trading above the 50-day SMA ($85.72), which often acts as a key support level for intermediate-term trends.
While UNM is currently trading in the upper part of its 52-week range (between $68.28 and $93.22), the S&P 500 is near new highs. This suggests UNM is a solid, but not leading, performer in the current market environment. Its relative strength confirms this, as it has outperformed 67% of all stocks over the last year, reinforcing its place as a stock with a durable uptrend.
Setup Quality: A Consolidation Pattern Emerges
Having a stock in an uptrend is only half the battle. The second, crucial part is finding a good entry point. A high Setup Quality Score (above 7) indicates a period of price consolidation, where the stock is "resting" after a move. This creates a tighter trading range, allowing for a well-defined support zone and a logical place to set a stop-loss.
UNM's Setup Rating of 8 suggests exactly this kind of pattern is forming. The stock has been trading in a relatively wide range of $85.51 to $93.22 over the last month, but it is currently trading near the low end of that range, which can be seen as a pullback within the larger uptrend. Volatility is also decreasing, a common characteristic of a base-building formation.
The technical analysis highlights a support zone ranging from $85.72 to $88.43, formed by a combination of moving averages and trend lines. This provides a clear area below which a stop-loss could be placed. Just above the current price, there is a resistance zone at $92.73. A potential entry point could be a buy stop order placed just above this resistance level, confirming a breakout from the recent consolidation. This structure gives the trader a defined area for a potential entry and a clear level for managing risk, which is the core advantage of a high-quality setup.
Finding More Breakout Candidates
The combination of a strong uptrend and a high-quality consolidation pattern is a strong signal, but it is rare. For every stock that meets the criteria, many others do not. Traders looking for more stocks with similar technical profiles can run the same scan themselves. A fresh list of potential breakout setups can be found every day by running the Technical Breakout Setups screen in the stock screener. Click here to view the current results of this screen.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Trading stocks involves risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research and consider your financial situation before making any trading decisions.
Read full article here »
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Unum Group (NYSE:UNM) Shows Strong Technical Setup for Breakout
One way to cut through the noise in the stock market is to focus on a dual-pronged technical strategy: first, identifying stocks that are in a solid, established uptrend, and second, waiting for a favorable entry point that minimizes immediate risk. This approach avoids chasing stocks after a big run-up and instead looks for a healthy consolidation pattern within a strong trend. By screening for stocks that score high on both technical health and setup quality, traders can find candidates that offer a more structured risk/reward profile.
Unum Group (NYSE:UNM) currently fits this profile well, registering a Technical Rating of 7 out of 10 and a Setup Rating of 8 out of 10. A full breakdown of these scores can be found in the ChartMill Technical report.
Technical Strength: A Solid Uptrend
The first pillar of this strategy is ensuring a stock is technically sound and moving in the right direction. A stock with a Technical Rating of 7 or higher is considered to be in an uptrend, making it a candidate for further gains. UNM's rating of 7 is supported by several positive factors.
The long-term trend remains positive, even though the short-term momentum has recently paused. All major moving averages—the 20-day, 50-day, 100-day, and 200-day Simple Moving Averages (SMAs)—are rising, which is a classic sign of a healthy, sustained uptrend. The stock is also trading above the 50-day SMA ($85.72), which often acts as a key support level for intermediate-term trends.
While UNM is currently trading in the upper part of its 52-week range (between $68.28 and $93.22), the S&P 500 is near new highs. This suggests UNM is a solid, but not leading, performer in the current market environment. Its relative strength confirms this, as it has outperformed 67% of all stocks over the last year, reinforcing its place as a stock with a durable uptrend.
Setup Quality: A Consolidation Pattern Emerges
Having a stock in an uptrend is only half the battle. The second, crucial part is finding a good entry point. A high Setup Quality Score (above 7) indicates a period of price consolidation, where the stock is "resting" after a move. This creates a tighter trading range, allowing for a well-defined support zone and a logical place to set a stop-loss.
UNM's Setup Rating of 8 suggests exactly this kind of pattern is forming. The stock has been trading in a relatively wide range of $85.51 to $93.22 over the last month, but it is currently trading near the low end of that range, which can be seen as a pullback within the larger uptrend. Volatility is also decreasing, a common characteristic of a base-building formation.
The technical analysis highlights a support zone ranging from $85.72 to $88.43, formed by a combination of moving averages and trend lines. This provides a clear area below which a stop-loss could be placed. Just above the current price, there is a resistance zone at $92.73. A potential entry point could be a buy stop order placed just above this resistance level, confirming a breakout from the recent consolidation. This structure gives the trader a defined area for a potential entry and a clear level for managing risk, which is the core advantage of a high-quality setup.
Finding More Breakout Candidates
The combination of a strong uptrend and a high-quality consolidation pattern is a strong signal, but it is rare. For every stock that meets the criteria, many others do not. Traders looking for more stocks with similar technical profiles can run the same scan themselves. A fresh list of potential breakout setups can be found every day by running the Technical Breakout Setups screen in the stock screener. Click here to view the current results of this screen.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Trading stocks involves risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research and consider your financial situation before making any trading decisions.
Read full article here »