I'm staying with a conservative bent on the long side. I'm not sure if it's completely fair to call Windstream Holdings (WIN) conservative, but from a technical standpoint, there is strength and potential in the chart. WIN has been beaten down significantly during the last year. A bottom was made toward the end of July and the stock has been a rocket higher since that point. Still, I think there may be room here, even enough for WIN to return to double digits.
On the daily chart, the shares just broke higher out of a bull flag formed in August. This push has set us up for a test of the June support levels, now resistance. A very slow and elongated inverse head and shoulders appears to have formed as well. A few closes on the daily chart over $7.65 and WIN could be set for a quick pop to $8.50, then a continuation to the pattern's upside target of $10.75.
I would like to see the 50-day simple moving average (SMA) curve higher and follow the path of the 10-day SMA, but that will take a few more days. Beyond that concern, the momentum, trend, volume and price action are all very bullish.
We have to be careful if indicators such as the relative strength index (RSI) drop below 70 or the force index moves into the red. If one indicator turns, I'd likely put a trailing stop on the position. If two turn, then I'd look to hedge or exit. Any close under $7 puts us back in the recent bull flag and would shift gears to neutral. A close under $6 and I would expect a retest of the July lows.
The weekly chart is waiting on the same breakout as the daily chart. The pattern here is much more "V" than inverse head and shoulders. We still have the same upside price target, but notice the vacuum above $8. There hasn't been much in the way of volume between $8 and $11, so resistance should be minimal.
I'd like to see price close over resistance and the 13-period RSI break above 50 while the vortex indicator experiences a bullish crossover. That may seem like a lot to ask for, but in this market, I really want to see price, trend and momentum moving together. Otherwise, I would expect underperformance if the market weakens. The triggers are close here, so a little patience is logical.