Legg Mason ($LM) hit my radar this weekend for its setup on both its weekly and daily charts. As you can see in the weekly chart below, $LM just closed above resistance at $35 with above average volume. Why is this significant? Because the $35 has been a strong area of resistance for $LM since March of 2016 and buyers are moving in to push this higher. Additionally, the weekly RSI broke above resistance and closed to highs it hasn’t seen since early 2015.
The opportunity Legg Mason presents is only technical and does not consider its fundamental condition. To me it is important that both the fundamental and technical health is aligned before entering any trade. Legg Mason fails to meet my fundamental requirements to swing or trade long, but it still could make for a profitable play.
$LM currently ranks 45th in group by Investor’s Business Daily and has a Composite Score of 51. The good news is that the Accumulation/Distribution rating is A, indicating heavy institutional accumulation over the past 13 weeks.
Technically, I love this setup and I expect $LM could continue to climb back to the mid-$40s again. I am certainly going to keep my eye on this one and could even dive in a small position for a few days if the opportunity is right.