FIRST HORIZON CORP (NYSE:FHN) Shows Strong Technical Breakout Potential with High ChartMill Ratings

Technical breakout strategies help identify stocks with strong momentum that are preparing for their next upward move. By using a high ChartMill Technical Rating (measuring trend strength) and a high Setup Quality Rating (identifying consolidation patterns), traders can find potential breakout candidates. FIRST HORIZON CORP (NYSE:FHN) currently matches this profile, showing both technical strength and a promising setup.

Technical Strength: A Strong Base

FHN has a Technical Rating of 8, reflecting solid trend performance across different timeframes. The technical analysis report notes several positive points:

• Trend Consistency: The stock maintains a positive long-term trend while showing neutral short-term movement, suggesting it may continue upward after consolidation. This matches the strategy's focus on stocks with steady upward momentum.

• Relative Strength: FHN has outperformed 84% of all stocks over the past year and ranks in the top 14% of its banking industry peers (393 stocks). Strong relative performance is important for breakout candidates as it shows market leadership.

• Moving Average Support: The stock trades above all key moving averages (20, 50, 100, and 200-day), with each average trending upward. This layered support structure lowers downside risk, a key factor when evaluating breakout potential.

Setup Quality: The Consolidation Phase

With a Setup Rating of 9, FHN presents one of the best consolidation patterns available:

• Tight Trading Range: The stock has moved between $20.89 and $23.00 over the past month, recently stabilizing near the middle of this range. This compression often comes before a directional move.

• Clear Support Zones: Multiple support levels exist between $21.15-$21.70, formed by converging trendlines and moving averages. These provide logical areas for stop-loss placement, an important part of breakout trading.

• Lower Volatility: The Average True Range (ATR) is at 2.53%, showing reduced price swings during consolidation, a sign of a strong base.

• Pocket Pivot Signal: Recent accumulation activity suggests institutional interest, often a sign of an upcoming breakout. This aligns with the strategy's focus on stocks attracting large investors.

Trading Considerations

The automated analysis suggests a potential breakout above $22.44 (resistance) with downside protection at $21.14 (support), representing a 5.8% risk range. While the setup looks technically sound, traders should:

• Watch the banking sector's overall performance, as group trends often affect individual stocks.
• Look for higher volume on breakout attempts, as low-volume breakouts often fail.
• Consider earnings dates or other fundamental events that could impact price movement.

For investors looking for similar opportunities, the Technical Breakout Setups screen updates daily with new candidates meeting these strict technical criteria.

Disclaimer: This analysis is for informational purposes only and should not be taken as investment advice. Always do your own research and consider your risk tolerance before making any trading decisions.