Double-Bottom Pattern Neckline and Ichimoku Cloud Resistance

Blackrock Inc. (ticker: BLK) recently established what many chartists would recognise as a double-bottom pattern from around $753.83. The neckline for the pattern is seen at $789.08, which has yet to be breached, so the pattern’s formation has not been completed.

Once, or if, we see a daily close form above this neckline, this would prompt chart pattern traders to apply a profit target derived from the lowest low in the pattern to the neckline and extend this value from the point at which price broke above the neckline.

Price action also recently traded above the Conversion Line from the Ichimoku Indicator and is fast closing in on the Base Line, now trading at $785.33. You will also see that the Ichimoku Cloud recently formed resistance between the Leading Span A and Leading Span B at $777.94 and $781.95, respectively. If price should venture above this area, this would add weight to the break above the double-bottom’s neckline and signal movement towards the pattern’s profit objective. What bulls will also be watching for here as additional confirmation is the Conversion Line crossing back above the Base Line.

Price Direction?

Overall, this stock’s direction depends on how price reacts at the double-bottom pattern’s neckline if it is tested. A close higher signals increased prices could be in store above the Ichimoku Cloud resistance and might be enough to drive bullish interest. Alternatively, dominantly defending the lower side of the neckline, which, as you know, is located within the Ichimoku Cloud Resistance, may trigger bearish action.

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