If the market continues to rebound this NASDAQ leader will explode higher.
The SPY and QQQ are sitting right below their 50-day averages, a close over these levels could trigger a test of the market highs.
Leading stocks like today’s trade idea can skyrocket when markets rebound from their 50-day averages.
The tactic here is to identify the first stocks to move to new highs when markets start to rebound.
By the time the markets get to their previous highs, the leading stocks will have racked up big gains.
If the markets rollover or struggle to move higher, very often these leaders will remain strong unless the market breaks down to new swing lows.
As you can see in the chart below Workday, Inc (WDAY), is a NASDAQ leader breaking out to new highs, and a great candidate for this strategy.
The entry trigger is a break over $209, but I would not pay over $209.50.
This a volatile stock that is likely to pull back and test $209.
As a result, the buy zone is between $207 and $209.50.
If the breakout is good, it should not trade below $199.
Therefore, the stop is under $199.
Don’t be discouraged by a high price. Trade fewer shares and enjoy the big price swings.
Rick Nartarian, Chief Investment Officer
The American Investor Daily