I like to keep trading simple.
Sometimes the market really helps out, like it did yesterday.
Yesterday’s trade idea got off to a great start in a big down day, and expect today’s trade idea to do the same.
Click here to see both trade ideas.
First, a quick follow up on yesterday’s trade idea, CHD. Its breakout over $75.50 was impressive on a down day in the market.
Now that it has broken out, if you’re not in it, look for a pull back to the $75.50 level so you can use the same stop outlined yesterday.
Today’s idea is a classic pattern, and it’s showing up at the perfect time – when the market has had a correction well below its 50-day average.
As you can see in the chart below, Ball Corp (BLL) has bounced off its 50-day average over the last two days. More impressive is that, it has happened as the market has had 2 weak days.
This is a very simple set up when everything lines up so nicely, and it’s very effective.
The best stop is under the retracement low and 50-day average, so under $60.
However, if you’d like to tighten your stop, under $60.80 is a good choice.
With that in mind, I would not want to pay more than $62.50.
And if it’s trading under 61.40, then it’s weaker than it should be so I would not buy below that level.
That means the trade setup is to enter between $61.40 and $62.50 with a stop under $60.80 or $60.00.
Nice and simple.
Rick Nartarian, Chief Investment Officer
The American Investor Daily