Early last week I suggested that the market was setting up for a big move and I gave you the steps to identify the direction.
The direction turned out to be up.
When the market turns up after a significant correction, some stocks defy gravity, and provide incredible gains for traders who like to buy breakouts.
The danger in these trades lies in the fact that when the general market bounces off of a low and then resumes its down trend, the ‘gravity defying’ stocks often plunge well below their buy points.
So be careful with this one.
Workday (WDAY) is a highflyer that has proved its worth during and ever since the December market plunge.
On Friday it closed at an all-time closing high.
The best stop loss would be under $162.
Any pullback that stays over $169 is very strong, so I’d look to be a buyer on weakness until $169 with a stop under $162.
Another option for a tighter stop is under $166. If you don’t get a chance to buy a pull back then a breakout over $172.50 with a stop under $166 is another way to play it.
This is likely to be a volatile stock. If it hits $180 consider taking some profits and definitely move your stop up to a no loss.
Rick Nartarian, Chief Investment Officer
The American Investor Daily