By: Evan Lazarus
Just before the New Year, some of our traders were focusing on a short setup in SanDisk (SNDK). The stock had run up aggressively during the holiday sessions and setup well as an extended short setup once a topping tail appeared on the daily. Now we can see yet another topping pattern take shape in SNDK, this time of the Head and Shoulders variety. Let’s take a look at the 15 minute chart.
You can see the neckline level clearly established at around $30 in this formation. With the lower high put in place by the right shoulder, we can start looking for a trade entry. Keep a watchful eye on SNDK to see if it breaks its support (neckline). Should we get a convincing break of this level, the technical pattern suggests a potential move down to $28.
