Wait….before you hang up the mouse for the year, check out Scotts Miracle Grow (SMG) (December 28, 2017)
SMG
Scotts Miracle-Gro ( NYSE: SMG ). There are a lot of uses for fertilizer only one of which is fertilizing your backyard or your front yard for that matter. The whole pot industry, I think those guys seem to need fertilizer among other things. I hadn’t look at Scotts Miracle-Gro ( NYSE: SMG ) for a while and I feel like I am just maybe a couple weeks late in looking at this stock.
If we zoom out here, let’s go out to the weekly chart, you can see how this stock has traded. This is just kind of a walk down memory lane. There is absolutely nothing about this part of the pattern that is relevant today, nothing; it just kind of interesting to look at. The stock has been in a base for a couple of years, right? Then it finally starts drifting higher and then it has been basing again. It looks like it is just starting to break out here above $100.00 so this looks interesting.
We will zoom in and look at the daily chart again; now I am looking at this as this kind of thing, we have got this kind of thing going: Low, lower low, higher low, and this would be, Boom! the neckline, right here. It is a head and shoulder continuation pattern, which there really are head and shoulder continuation patterns. They are not like the tooth fairy, they actually will leave quarters under your pillow if you see them. This here really just broke out above $100.00. And if I do my typical measured move here to get a price target I will look down here and we will say it is $81.00. Go all the way up to the breakout and that is about 22 percent, about $18.00 or so, so keep that in mind.
So where are we going if this is the breakout level? We have got another $18.00 or so; 22 percent would still have to be up a little bit higher. So my price target on this, just kind of putting the thumb up in front of the eyes and look at the chart, is $120.00. That is how I would look at this as a potential stock move. I like this right here and the thing is you can buy this with a pretty decent amount of risk management. Because if you look at $100.00, not 102.00 but actually we just kind of look down here at $100.00, you have got about a 5 percent risk if you are buying now. You place the stop here below the 50-day moving average and you have got about a 5 or 6 percent risk.
But I think you can even do better than that. I think you can put your stop a little bit below 102.00. Because if the stock is pulling back here, that’s fine it can do that. This is kind of a more recent breakout; break out above 102.00 which was this high. A little pullback so the prior breakout level is now support so this should really hold at 102.00. If you are a little bit skittish, and that’s fine, you put a $3.00 stop loss on this; you are buying here at 104.96, you are putting a stop at 101.92, about that.
If I am right about the direction of this stock, and by the way, I could always be wrong but I think I am right here; if I am right about the direction of this stock you have a low-risk trade. You are risking $3.00, and if our price target is 120.00 then that is $15.00. So you are risking $1.00 to make $5.00; basically is how that is looking. That is not a bad way to go so I like Scotts Miracle-Gro ( NYSE: SMG ) here. I haven’t bought any yet but I will tomorrow. Maybe you should consider that too.
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