A rectangle pattern has formed in the chart of LivaNova.  A rectangle pattern is when a stock stays within a sideways trading range and a resistance level and support level are formed.

LivaNova (LIVN) is a U.K.-based medical device firm primarily focused on cardiovascular and cardiopulmonary solutions and neuromodulation devices for treatment-resistant epilepsy and depression. The company is in the midst of presenting findings of Autonomic Regulation Therapy for heart failure at the European Society of Cardiology Congress, which is running through tomorrow.

Take a look at the 1-year chart of LIVN below with added notations:

Chart of LIVN provided by TradingView

After dropping in the month of March, LIVN rallied and then has moved a sideways trading range for the last 5 months. While in the range, the stock has formed a key resistance area at $57.5 (red), and an important level of support at $45 (green).  At some point, the stock will have to either break the $57.5 level or the $45 support.

The possible long positions on the stock would be on a breakout above $57.5. The ideal short opportunity would be on a break below $45.  Currently the stock is trading within 4% of the $45 support level.  So keep a close eye LIVN.

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LIVN shares were trading at $47.00 per share on Monday morning, down $0.32 (-0.68%). Year-to-date, LIVN has declined -37.69%, versus a 10.00% rise in the benchmark S&P 500 index during the same period.

About the Author: Christian Tharp, CMT

Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...

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