Corn & Sony Both Provide Potential Trading Opportunities

First Potential Trade

Sony Corp. has been in a Falling Wedge pattern since the beginning of March 2011. A falling wedge pattern is a contracting trading range with a downward tilt, illustrated by the two blue lines. This type of pattern is typically a reversal pattern and it looks as though the company may be about to breakout of this pattern to the upside.

For the pattern to confirm I’m looking for a decisive breakout on high volume. Such a breakout should propel the stock to around $26 however a tight stop should be set at around $16 to avoid disappointment.

A 2 Year Chart of Sony Corp.

Chart courtesy of Stockcharts.com

Second Potential Trade

Corn has been forming a Descending Triangle pattern which is generally considered to be a continuation pattern. A bounce off the downward sloping resistance line (circled), followed by a violation of the horizontal, support line (also circled) on high volume, would present an excellent opportunity to short the commodity.

A 14 Month Chart of Corn

Chart courtesy of Stockcharts.com

I will keep an eye on both of these potential trades and provide updates as appropriate.

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