Paychex: Steady Growth Stock Attempts Cup & Handle Breakout
Paychex isn't the most exciting stock on the planet. But it's forming a textbook cup and handle pattern, which may indicate a breakout is coming.The payroll processing company surged about 40 percent between the end of 2018 and June 2019. It's consolidated those gains since, basing around $80 last August-September (cup), followed by a higher low around $82 in November (handle).
PAYX squeezed into a tighter range since then, finding support above its 200-day and 50-day simple moving averages (SMAs).
Next came its big candlestick from the December 18 earnings report. PAYX tried to gap higher on strong results and higher guidance, but sellers quickly swatted it back down to its range. The stock consolidated for a few more weeks before running to a new high pennies below $90. It then pulled back and held the 50-day SMA on January 31.
After that, it formed a tight channel between $87.25 and $88.90, which it's now on the verge of breaking.
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