This stock is following a very bullish pattern.
It exploded higher on good earnings, retraced to support, and is now resuming its up trend.
Click here for instruction on how to buy the next dip.
It’s good to have stocks on your watch list that are good candidates to buy on dips. Today trade idea is a good ‘buy the dip’ trade.
Foot Locker (FL) has the ingredients of a chart that is setting up to run significantly higher, and it’s already started.
It’s recent pullback low at $60 sits on a significant level of prior resistance and the 50-day moving average.
Therefore, $60 creates a good stop.
Normally I advocate buying on a breakout, but in this case, the initial breakout to buy was over $61.50. So in this case, the trade is to wait for an entry under $63 to keep the risk in line with the potential reward.
The weekly chart (not shown here) suggests that the breakout over $61.50 could run up to the $70-$75 level. So with an entry price of $63 or less, the trade has a reward that is at least 3x the $3 risk to the stop level.
Rick Nartarian, Chief Investment Officer
The American Investor Daily