Stock of the day: Moody's Corp

Stock of the day: Moody's Corp
In today's analysis, let me introduce Moody's Corp. Reflecting the broader market, Moody's Corp started a bearish correction last Friday. It presents, however, a unique technical scenario that's worth examining. The stock had followed a distinct pattern and its correction has set up an intriguing trading situation.
Highlighted in yellow on the chart, a substantial inverse head-and-shoulder pattern emerged in May 2022. The first days of this June marked the breakout of the neckline (indicated in green), giving us a solid long-term buy signal.

Investors heeded this signal and the price was climbing until Friday, where it met significant horizontal resistance denoted by the orange line on the chart. The resistance corresponds to previous support from October 2021 and resistance of the first quarter of 2022, making it unsurprising that this point started a bearish correction.

Currently, the short-term sentiment leans towards negativity and there's a high probability of a reversal towards the neckline. The primary scenario I see unfolding is a drop in price towards the green support. As long as the price remains above the green line, though, the long-term sentiment remains positive. A price drop below the green line would be the only thing that could shift the long-term sentiment to a negative one.
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