Software company Ebix (EBIX) rallied to $30.35 in March 2011 and sold off into single digits in 2013. It entered a new uptrend in July of that year and returned to multiyear resistance about two months ago. The rally then stalled, yielding a pullback that landed on the 50-day EMA about two weeks ago. The stock hovered at that level for seven sessions and shot higher on Friday, after reporting strong earnings.
The rally completes the next stage of a cup-and-handle pattern that could trigger a major breakout to an all-time high, but several factors may slow the upside. First, On Balance Volume hasn't recovered from a 2013 collapse that dropped the price nearly 50% in one day. Second, Friday's vertical pop from range support to resistance is likely to yield a back-and-fill consolidation pattern that drops the price toward $28.50.
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