PayChex Looks to Hit Payday with Momentum Breakout

Arthur Hill
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com

PayChex (PAYX), which has nothing to do with Chex cereal, ended its correction with a three-day surge and wedge breakout. First and foremost, the long-term trend is up as the stock broke out in early October and hit a 52-week high in December. The stock was quite extended after 30% advance and then took a breather with the wedge pullback.

A small wedge after a sharp advance is a correction and this makes it a bullish continuation pattern. Notice how the stock bounced off the rising 50-day SMA last week and continued with the wedge breakout this week. This means the uptrend is resuming and I would expect new highs in the coming days. The indicator window shows the Commodity Channel Index (CCI) dipping into oversold territory twice and then exceeding the intermittent high for a momentum breakout.

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst, StockCharts.com

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About The Author:

Arthur is the Chief Technical Strategist at TrendInvestorPro. Focused primarily on US equities and ETFs, his systematic approach of identifying trend, finding signals within and setting key price levels has made him an industry-leading technician. Learn More 

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