Ball Corporation heading for congestion

I’ve moved to the monthly chart for this stock which is the Ball Corporation (BLL) as this once again demonstrates the importance of the technical picture when considering stock investing for the longer term. Whilst this is a slow timeframe, the same principles apply to a weekly, daily or intraday chart.

If we start with the support and resistance regions, once again they are defined by the Quantum accumulation and distribution indicator on NinjaTrader as the stock congested in a tight range over an extended period, with the ceiling created at $42 and the floor at $30.80. The volume point of control remains anchored at $38 and denoted with extreme volume and the VPOC itself in yellow. Finally, towards the end of last year, the stock breaks away from this region on excellent volume which confirms the market makers are developing the price higher and which has continued since the start of the year in a series of clean up candles, suggesting there is more to come in the near future. However, a note of caution is now on the horizon since we see a classic scenario of potential weakness ahead with steadily rising prices associated with steadily falling volume. Effort and result are in disagreement.

However, what is also interesting here is the trend of the stock this month has continued higher and in sharp contrast to the trend in the major indices which have been selling off over Sino US tariff worries.

So in summary, a warning has been posted, and we can expect to see a pause and possible congestion, but should this phase see further buying by the market makers at the current levels, then further gains will follow. Note also how the trend monitor indicator continues to support the bullish picture with only a short period of sentiment reversal occurring in the mid part of last year, and with low volume now ahead on the volume point of control histogram, this too will help to provide an easy path through provided the congestion phase on the horizon is not too extensive and the up candles are supported with strong and rising volume.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading