Waste Management (WM) is forming a large cup and handle pattern on the charts
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The shares of Waste Management, Inc. (NYSE:WM) have formed a large cup and handle pattern on the charts as they break above their 50-day moving average. This trendline acted as a solid pivot point for both bearish and bullish trends in the past. Breaks above this trendline produced positive returns 67% of the time over the past five years, with an average gain of 7.3%.
WM has also held its 200-day moving average -- which has produced good entry points -- and the year-to-date anchored volume weighted average price (AVWAP). The year-to-date breakeven level served as support over the past two weeks as well.
In terms of options, the shares have bounced at the large 160-strike put level, while the 175-strike call level could act as a magnet moving forward. Our recommended August call has a leverage ratio of 14.1, and will double on a 7.5% pop in the underlying shares.