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Weak Volume Could Temper United Technologies (UTX) Stock Rally

NEW YORK (TheStreet) -- It is not a huge bottom. It is not a big bottom. But it is a bottom formation for United Technologies Corp. (UTX - Get Report) and prices have rallied today over the "neckline" of this pattern.

Reading the daily chart, above, from right to left, we can see a small head-and-shoulders bottom pattern on UTX. However, the pattern is only two months in duration when it is better to look for several months, or even a few quarters, for a "proper" head-and-shoulders bottom. The pattern is the right shape, but the volume of shares traded in UTX doesn't increase through the pattern.

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As the stock starts to make a major bottom pattern after a major decline, the volume is light on the left shoulder. Traders and investors are not that sure the company will indeed pull off the anticipated turnaround. Maybe one to two quarters later investors will be more convinced of the turnaround and the volume will be heavier on the head and the right shoulder. The On-Balance-Volume line (OBV) in the chart above has only started to inch up in the last month.

While the volume isn't in gear, there is a good...