In today’s Stock of the Day, we’re focusing on Verizon Communications (VZ), which is sitting at a technically critical level — and shaping up for a potentially high-probability trade.
Over the past several months, Verizon has been moving inside a symmetrical triangle, defined by clean blue trendlines. This pattern resolved in mid-June with a breakout to the downside, which, under normal circumstances, would act as a signal to sell.
But the move lower was short-lived. The price barely made it past the first major support — marked with a black horizontal line — before bouncing back. The breakdown, highlighted in yellow, has all the signs of a false bearish breakout, a classic trap for short sellers.
Now, price is once again pressuring the upper boundary of the triangle. A breakout above that top blue trendline would not only invalidate the previous bearish signal but also confirm a bullish reversal, fueled by the failure of the downside move.
If that breakout is confirmed on a closing basis, it would represent a strong buy signal, based on the combination of a failed breakdown and renewed bullish pressure — a setup seasoned traders recognize as high probability.