Want to take a shot at Smith & Wesson (SWHC)? Check this chart first. (August 11, 2016)

by DAN SWHC 
I want to look at Smith & Wesson ( NASDAQ:SWHC ) here. This is why: Earlier today I was looking at this video and I thought, “Wow! This would be a brutal one, but kind of a cup and handle type thing.” It’s about the right time reference. Sideways consolidation, and then now a breakout so, “Hey! This looks like it could work pretty good.” The only problem was that there was no follow through and that’s why I’m pointing this out. Earlier today, if we look here, right out of the gates the stock opens up, it’s up here at, we’ll call it $31.00. If you look at it on the daily chart when the stock is trading up at $31.00 this looks like a real bonafide breakout. A nice high volume breakout. But it didn’t hold.

So what do you do now? Well, the breakout that you were looking for didn’t hold. So seriously, you do nothing. You do nothing. You watch the stock, ultimately it seems like Smith & Wesson ( NASDAQ:SWHC ) will go higher. I know I’m helping them out as much as I can with my purchases. But here’s the thing, you can set a price alert back above this high here. I’m not talking about TODAY’S intraday high. I’m talking about, you set a price alert here, 30.59, in fact you can do it here on TC2000 software, it works really good. Create price alert, we’ll call it 30.60. Keep this a week, yes, we’ll keep it a week. We’ll start it an hour later. And then if that price alert goes off then I know it’s cleared this level and now I can start WATCHING it to see if it makes the move through today’s intraday high.

So this is a way you kind of get set up on a trade rather than looking at it later and say, “Oh man! I wish I had seen that. I saw that but I missed it. Maybe I’ll buy it at 33.00.” Don’t be that guy. Just recognize that pattern, recognize what has to happen in order to make it actionable and then wait for it to happen. Don’t plan for it to happen. Don’t expect it to happen. WAIT for it to happen and THEN take action on the plan that you made.

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