4:30 PM – BREAK OUT UPDATE
With this week’s rotation out of leading growth stocks, we got stuck playing some defense. At least we’re able to reaffirm some of our basic trading disciplines. Guidelines which we’ve presented for nearly 20 years – such as the importance of our 1st and 2nd SUPPORT levels, along with the basic 50-day moving averages, daily price/volume action, chart trendlines, and our MAX STOP LOSS GUIDE.
Here is one example using one of our current breakouts:
IHS Markit Ltd. (INFO – NYSE)
Markit Ltd. was a global financial information and services company with over 4,000 employees, founded in 2003 as an independent source of credit derivative pricing. The company provides independent data, trade processing of derivatives, foreign exchange and loans, customized technology platforms and managed services.
9/15 UPDATE: This recent breakout actually traded higher on Monday morning, before selling off in the afternoon. Shares held right at our previously noted 1st SUPPORT ($66) on Tuesday with the low being $66.01.
At that point, the 50-day moving average started to come into play and as I have explained previously – that can draw the price a bit lower – which happened on Wednesday.
|SYM||LAST||ADDED TO WATCH LIST||BREAKOUT
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
|MAX BUY PRICE||1st SUPPORT||2nd SUPPORT||MAX STOP LOSS GUIDE||% GAIN/LOSS|
now: 50 DMA
|was: 50 DMA
The stock did hold well above what was our 2nd SUPPORT of the 50 DMA.
Thursday’s gains were bullish as shares advanced better than +3% with a +65% increase in volume, putting the stock back near the previous Friday’s new highs. The volume-backed gains continued the following day and that had us end the week with a +2.5% position gain.
In this week’s Sunday Stock Report, I take a closer look at how the principles shown above should have been applied during the past week’s shakeup.
You can now receive this week’s Sunday Stock Report, and also get my watchlist for the week, when you request your complimentary copy here.
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