Will SHERWIN-WILLIAMS CO/THE breakout?

A possible breakout setup was detected on SHERWIN-WILLIAMS CO/THE (NYSE:SHW) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:SHW.

Zooming in on the technicals.

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Overall SHW gets a technical rating of 7 out of 10. Although SHW is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• The long and short term trends are both positive. This is looking good!
• In the last month SHW has a been trading in the 226.50 - 249.92 range, which is quite wide. It is currently trading near the high of this range.
• When comparing the performance of all stocks over the past year, SHW turns out to be only a medium performer in the overall market: it outperformed 49% of all stocks.
• SHW is part of the Chemicals industry. There are 122 other stocks in this industry, SHW did better than 48% of them.
• SHW is currently trading in the middle of its 52 week range. This is in line with the S&P500 Index, which is also trading in the middle of its range.

Why is NYSE:SHW a setup?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:SHW this score is currently 9:

SHW has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 252.02. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 244.32, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading breakout setups.

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

More breakout setups can be found in our Breakout analyzer.