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Fan Yang

Boston Beer Company (SAM) faces strong resistance factors

Samuel Adams maker, the Boston Beer Company, was bearish entering the year ,but seems to have found support in May. Since then, we have seen price rally from a low near 145.35 up to about 195. 

SAM Daily Chart 8/17

(click to enlarge)

Falling trendline:
- As we can see in the daily chart, SAM is being challenged by a falling trendline.
- Furthermore, there is a support/resistance pivot area between 195 and 201
- We also see the daily RSI around 70, which reflects overbought conditions. 

Bulls vs. Bears:
- On one hand, it seems like the rally since May is strong. 
- On the other hand, the prevailing bearish trend is still intact. 
- With an intact bearish trend, the resistance and overbought conditions should be respected. 
- In other words, don't be surprised if price slides back towards 170. 
- If price breaks above 202, it would have cleared the critical resistance to open up a bullish reversal scenario.
- For now, the bullish run in 2016 should be considered just another correction within the context of a bearish trend that might simply continue to chug along unless price can break above 202. 

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