This Household Name Is Breaking Out

Today I continue with this week’s series of trades to buy on pullbacks.

The retail sector has been one of the worst performing sectors since the 2018 market highs, but this stock has held firm through the sectors decline.

It has also been basing for about 18 months.

Unfortunately, the chart below only shows half of the base that Under Armour (UAA) has formed since first breaking above its 200-day moving average in January of 2018.

https://lh3.googleusercontent.com/z1Ynr202kdo5J2p1frRkZwTcgNjB25IWZ4AeKJ4mEfXus1OlV4eJdx9Rd0JCFWx2SDIbWPVOnuJ0erRtf6eOnu4-nBQ5lwArwxpmiydFo9qgVLlkfs72Sd2rArSjCljviKHXHKOT

The $24-$25 level was a high in April, October, and November 2018 as well as the times you see on the chart.

So the break over this level in the last few days may have just begun a bull move that could easily run to $30 quickly in a bull market.

The size and duration of this base, and the fact that it created this base during a very weak period for the sector suggests that this could be a long-term bottom.

There is a good chance that it will pull back slightly, so the trade set up is to buy between $24-$25 with a stop under $23.50.

UAA has a good option chain, so if you’re interested in longer-term options plays the October 30 calls could be a good way to play for a 100%+ trade through the summer.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily