Here’s your trade on White Wave Food Company (WWAV). (May 08, 2015)
I want to look at White Wave Food Company ( NYSE:WWAV ). This is a company that makes that Silk soy milk everybody loves so much. I personally like the coconut stuff, but that’s a testerone thing. The company reported some pretty solid earnings on Friday; you can see what happened to the stock. This kind of gives you an opportunity. This is what I’m talking about: you get a pullback to the 50-day moving average and then the stock pops but it does not run, so it’s giving you an opportunity to get in.
Now, there’s two ways to go about this, I would prefer the first way, which is, hopefully you get more of a pullback. I really doubt that the stock is going to fall too deeply in to this box; put another way, it’s probably not going to close this gap. If it does then that’s a gift, you go ahead and take it. But try to buy the stock as close as you can to the 50-day moving average.
The other way that I’m talking about is, if the stock rises above the high here of 47.55 then that’s really a breakout buy, that’s a new high, you want to be buying that stock. The reason why that would be my less preferred method is because you’ve got so much volume here that it’s kind of eating up a lot of the buying pressure. If the stock does start moving much higher then how far up above the 50-day moving average is it going to be versus how far it’s been before it’s pulled back? And how far above the 200-day moving average is it going to be before it pulls back?
So in my view there’s not a lot of upside from where we are right now at 46.10, there’s not a lot of upside that benefits you from buying the stock on a breakout. There’s more upside if you let the stock settle in. Everybody got all lathered up on Friday and bought the S&P right up to resistance, so hopefully on Monday things settle down a little bit, you’ll get a little better opportunity to buy this stock closer to 44.00, something like that.
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