Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenu(See the video above for Jay’s complete chart breakdown.) Mastercard shares have been on a tear. The stock is up eight days in a row and is just now ticking to an all-time high. In fact, the payment stocks overall have been hot as of late. The combination of rising rates and resilient consumer spending is music to their ears. Mastercard’s top rival, Visa , is trading at new highs and so maybe MA could be headed for a breakout as well. Let’s look at the charts. The key level to watch is $600 and gives one a trading set-up that is worth keeping an eye on. This is our area of interest and gives us an IF THIS, THEN THAT scenario to trade… Near-term … If price fails to close above $600, a normal retracement would take the stock back into the mid $580s. Technically, shares are nearing overbought territory and could fade. Overall, the near-term trend is up and a pullback would be a buying opportunity. If price breaks above $600, shares clear a major hurdle and a quick pop — driven by a short squeeze and fast money playing the breakout — could follow. Upside targets of $620 would be achievable quickly. These are short-term opportunities for active traders, who should watch the $600 level closely. The risk-reward is about the same over the near term but momentum as we pivot from a key price level can be swift. We also see a potential cup-and-handle formation developing. Resolution to the upside above $600 would be great for that long-term view. Longer-term… Price action is bullish. Shares made a higher low when we back things out to the weekly chart and it has yet to hit overbought conditions. We want to keep a close eye on this one. IF shares can break and close above $600 on a weekly basis, we have price confirmation of a breakout and clearer risk/reward. THEN we want to get long and stay long using levels just under $600 as our stop loss. The potential gains over the longer term give us an upside price target of $720. We get that by adding the range of the neutral trend ($120 range) to the breakout price of $600. There will be ebbs and flows along the way, but the technical setup is there. Look for a potential retracement back to $600 after an initial breakout and then a resumption of a trend higher. Visa has already broken out, will Mastercard follow? -Jay Woods with Chase Games Jay Woods is the Chief Market Strategist at Freedom Capital Markets. DISCLOSURES : Woods owns Visa personally. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More