I talked about CNXT last Friday in the early afternoon and said “I would say that as long as it can hold 1.47 and keep its composure, I believe it could be setting up for another attack of that blue resistance line and a breakout type move”.
Today CNXT did not waste any time and shot up almost 29% from Friday’s close. The pattern on CNXT was quite powerful. It has a large saucer type formation after the huge sign of strength that occurred in mid-April. Clearly CNXT had a lot of sideways cause (potential energy) building for about 3 months.
The clue was the big volume attempt at a breakout 3 days ago and then the retracement back down to support. I said on Friday that it needed to hold 1.47 support other wise the scenario would be in doubt. It did hold 1.47, so no complaints there.
Clearly the market continues to be in an active state right now with plenty of break out type opportunities. Interesting that they are occurring this time of year now. Perhaps the current advance in the broad market will continue into September before any more significant correction occurs? That needs to be studied more closely.
But for now there continue to be breakout type opportunities and CNXT is just another example of one.
Honestly I would have to rate this CNXT breakout near the top of my list as far as quality, advance notice and overall setup type. It was a clean setup and the probabilities here were very favorable. Setups like this do not occur too frequently.
