The content below was from a post I originally published on March 3, 2011. Here is the archive. I am reposting it now to show how impressive the price action in both Visa and Mastercard have been this year, given the struggle of the overall market. MA was $261 when I wrote this post, and is currently $375. V was $75 then, and is now $96. I expect both stocks to be part of a new group of leaders, should the market breakout in the coming weeks.
Once known as reliable momentum names, notably Mastercard, the credit card players have recently become a much-maligned group, in the face if menacing regulatory risk out of Washington. However, a look at their charts of late is telling me to keep them on watch.
The weekly chart of Mastercard shows a textbook, multi-year symmetrical triangle near its apex. Note how all weekly moving averages are relatively compressed and are all below price, offering support. I am looking for a break and hold above $260 to validate the bullish move out of the triangle. In a similar vein, Visa’s daily chart shows price breaking out above all moving averages today, out of a descending triangle. Once again, all of those moving averages are now compressed and firmly below price, which usually portends a big move higher.
Both names can run much higher before they even come close to approaching multi-year highs.