This Trade Ignored The Fed, And It’s Ready To Run Higher!
Yesterday the stock markets were disappointed by what the Fed had to say.
Exactly how disappointed will become clear over the next several days.
If the market moves higher from here, then yesterday was just a knee jerk reaction, but if it moves lower, then we could be in for a market correction.
Big events like this in the market enable us to find stocks that are unusually strong.
Today’s trade idea is one that I highlighted about a week ago. It has been a good trade so far, and now it is set up for another opportunity.
Click here to get the details.
As you can see in the chart of Cree, Inc. (CREE) below, it did not move down very much yesterday.
If you’re a regular reader of this column, you can probably guess what I’m going to say next.
CREE’s strength in the face of a very weak market yesterday suggests that it wants to go higher.
In addition, CREE is a Semiconductor stock, and that’s one of the market’s strongest sector. I expect its strength and leadership to continue if the market moves higher.
Since yesterday’s market weakness may indicate a short-term top, it’s best to let CREE and the market demonstrate some additional strength before entering.
As a result, the trade entry should be on a move over the recent high of $63.34. I’d round the buy trigger up to over $63.50.
The stop should be under this week’s low of $60.91.
Some traders get frustrated by volatile days like yesterday, but as you can see with this CREE trade idea, it can create easy to identify trading opportunities!
Rick Nartarian, Chief Investment Officer
The American Investor Daily