December 4, 2012 (By Frank Kollar)
Shares of Adobe Systems (NASDAQ: ADBE) have broken out of a bullish pattern on their weekly chart.
Adobe has been forming a well developed pennant pattern on its weekly chart. The pattern has been created over a six month time-frame.
Looking at the weekly chart (below) you can see that Adobe has three short term corrections since reaching its long term correction low in May 2012. Each of these lows has reached a higher low before reversing to the upside. Since March 2012, Adobe has reached the $34.00 level three times and shortly after, reversed and corrected.
The pattern is called a bullish pennant formation. Typically, pennant patterns break in the direction of the previous trend, which in this case was a bullish one from April 2011 to March 2012.
Chart Courtesy of StockCharts.com
Adobe has now broken out of this bullish formation, closing on Monday December 3rd at $34.70.
We would now look for a test of the March 2012 rally highs. A close above this high would be bullish and point to a new leg up for this stock.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does not currently have a position in Adobe Systems.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.