In today’s stock of the day, let’s take a closer look at Mondelez, which is currently locked in a consolidation phase, waiting for a proper trading signal.
For the past few weeks, Mondelez’s price action has been moving sideways, forming a clear rectangle pattern marked with yellow on the chart. This consolidation range is bounded by a descending black trendline acting as dynamic resistance from the top and a horizontal blue support level from below.
This kind of price action signals indecision in the market and is often a prelude to a breakout in either direction. Traders should be watching closely for confirmation.
A breakout above the black downtrend line would indicate a bullish shift in momentum and serve as a signal to go long, especially if accompanied by strong volume. On the other hand, a breakdown below the blue horizontal support would trigger a bearish signal, opening the door for a deeper decline.
In short: the direction of the breakout from this rectangle will determine the next major move for Mondelez. Until then, patience is key.