SCHWAB (CHARLES) CORP (NYSE:SCHW) - A Strong Technical Setup Worth Watching

SCHWAB (CHARLES) CORP (NYSE:SCHW) has been identified as a strong technical breakout candidate by our stock screener. The stock displays a combination of favorable technical health and a well-defined setup pattern, making it an interesting prospect for traders. Below, we break down the key factors contributing to its appeal.

Technical Strength

• High Technical Rating (9/10): SCHW scores near the top of ChartMill’s Technical Rating, indicating strong momentum and trend health. Both short-term and long-term trends are positive, reinforcing the stock’s upward trajectory.
• Relative Strength: The stock outperforms 84% of its peers in the Capital Markets industry, reflecting its leadership in the sector.
• 52-Week High Proximity: SCHW is trading close to its 52-week high, a bullish signal, especially as it leads the broader market, which has not yet reached new highs.
• Moving Averages: The stock is positioned above key moving averages (20-day, 50-day, 100-day, and 200-day), all of which are trending upward—a sign of sustained bullish momentum.

Setup Quality

• Consolidation Pattern: SCHW has formed a bull flag, a continuation pattern often seen after a strong upward move. This suggests a potential resumption of the uptrend.
• Reduced Volatility: Recent trading has shown lower volume and tighter price action, indicating consolidation before a possible breakout.
• Clear Support and Resistance:
  • Support Zone: A well-defined support area exists between $87.24 and $88.24, providing a logical stop-loss level.
  • Resistance Zone: The stock faces resistance between $88.69 and $89.23. A breakout above this zone could signal further upside.
• Entry and Exit Levels: The setup suggests an entry at $89.24 (above resistance) and a stop-loss at $87.23 (below support), representing a manageable risk of 2.25%.

For a deeper look at the technicals, review the full technical report for SCHW.

Our Technical Breakout Setups screener lists more high-quality breakout candidates and is updated daily.

Disclaimer

This is not investment advice. The observations here are based on technical analysis at the time of writing, and market conditions can change rapidly. Always conduct your own research before making trading decisions.