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For today's chart we've chosen to take a look at Altria Group Inc. (NYSE:MO) because it is testing the support of a long-term ascending trendline. As you can see from the chart below, the trendline has propped up the price of the stock in the past and we believe that traders will be looking to buy shares as close to the trendline as possible because of the favorable risk/reward ratio. Technical traders will not want to bet against the rising trend until they see the price close below the illustrated support levels.

As many of you know, it is not uncommon to see a previous level that has prevented a move higher to change its role and become a new area of support. In our example, the bulls struggled to send the price above the $72.50 level in the early part of 2007. This level of resistance (shown by the dotted line) is now acting as support and many bullish traders will likely protect their position by setting their stop-loss order below the trendline.


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