Here’s your trading plan for Vishay Precision Group (VPG). (January 25, 2018)
VPG
This is a totally random video here. I haven’t looked at Vishay ( NYSE: VPG ) for probably 15 years, maybe more. There are reasons for that but you don’t care about them and I don’t care to talk about them.
I was just running through some scans and screens on Marketsmith today and this thing popped up. They are screens for stocks with specific fundamental criteria that tend to work in identifying strong growth companies. Then you overlay that with chart analysis and it is kind of like you are getting the best of the best. And that is really what it is, it is the best of the best screen.
So I was looking through those, and of course, you get like 50 or 60 names, and then you just start Boom! Boom! Boom! Banging through charts. I came to this one, I am looking at it and I see 46 thousand shares traded today, so it is really thin. Now, if you are on the wrong side thin is bad. If you are on the right side, thin to win baby. It absolutely works for you when it is really thin and the stock is moving up because it means it is tough to buy.
There is a 12 million share float on this stock, basically not that many shares. I am looking at the relative strength of the stock. It doesn’t look like much here, compared to the S&P ( INDEXCBOE: .INX ). But if you look at it in total it has got a relative strength of 91, this is on IBD’s platform. Then the earnings per share, the rating with respect to consistency and growth is also 91 percent. You don’t even have to look at a chart, from a relative strength and an earnings per share consideration this is definitely a stock to look at. That is just it, it is definitely a stock to look at.
Now, let’s go beyond looking at it and consider a trade. This is what I am doing: This is the last high here. I would say if the stock breaks out above 28.60 it would be a little extended, not too much, but it would be a little extended because of the move that it has made if it does it right away. If it breaks out above 28.60 I think you can buy it and then keep your stop $1.50 lower. Keep it within 4 percent so you are not risking a lot of money.
On the other hand, if instead of breaking out right away if Vishay ( NYSE: VPG ) tends to pull back, it consolidates, gives the 50-day moving average a chance to catch up maybe it even pulls down a little lower, this is the last low from this thing, I wouldn’t really want it to come back to 25.00, that means it has got a heck of a climb before it ultimately could even break out. But if it pulls back a bit, say even to here that would work too. It is kind of a mini cup and handle, we are just waiting for the rest of the pattern to go. It is plenty long enough for a cup and handle.
Like I said, this is kind of a random one here but this is a stock that is setting up to potentially be a good trade. Don’t go buy it tomorrow because you look at this video. Just watch it, wait for it to pull back a bit. You can take a little bit of stock there anticipating a move higher, not a lot, predicting a move higher but just buy a little stock on a pullback anticipating a move higher. If the anticipation doesn’t come if it is a Carly Simon kind of thing just ditch the stock. Then if the stock does break out that is when you add some more. Because again, THIN TO WIN. Look what happened the last time this stock broke out; it ran up 25 percent in three weeks of trading, less than three weeks of trading.
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