I expect a significant move, either to the upside or downside, is about to happen in shares of Unum Group (UNM).
UNM is a provider of group and individual income protection insurance products in the United States and the United Kingdom. UNM is the leading disability income writer and the second-largest writer of voluntary business in the United States. It has been benefiting from the acquisition of dental insurance businesses in the U.S. and U.K.
Take a look at the 1-year chart of UNM below with my added notations:
The reason I expect this is because over the past four months, UNM has reached $20 three separate times, creating a level of resistance (red). In addition, the stock has been climbing a clear trendline of support (green). Together, these two lines have formed an ascending triangle pattern.
It is likely that soon UNM will either trade over the $20 resistance level or fall under the trendline support.
Therefore, a trader could buy UNM if the stock exceeds $20, with an assumption of a breakout. Or short UNM if it falls under the trendline support, with the assumption of a breakdown.
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Christian Tharp, CMT
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About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.
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