The bulls are still greasing the skids with WD-40 (WDFC) (May 21, 2018)

print
WDFC 

One stock that is working is WD-40 ( NASDAQ: WDFC ). I covered this last week in the Weekend Update actually, on the Chart of the Day, the Free Chart video so I am just following up on this.

This is the type of thing that you want to see. You want to see the stock consolidating in a tight range close to the all-time high. You want to be always looking for stocks trading sideways, close to their all-time high. And then you look for the start of a breakout like this. That is when you start to jump on here because you can define your risk. You can set a stop below the congestion area and then you stay long a little more comfortably. Then the stock does this; I mentioned on Friday night, that even though the stock is up like this in two days, the stock was up over 3 percent, it was still not too late to buy this stock.

First of all, because the stock was not that extended above the 50-day moving average and then ultimately we got a move higher today, above 140.00. But also, if you looked at it on the weekly chart this stock still has a long ways to go. It had been consolidating, for how long? Over a year and a half between the first time it hit this 120.00 and then when it ultimately broke through, a little over a year and a half. But also if you just look at the top to the bottom here, about 17.00, 18.00, $20.00, 15 percent.

So if you look at where this stock broke out, $20.00 is where this is right now. So this has been a really good move. But it is the type of thing that you can game; you can see where the stock is likely to go. Now, this is what you have got to think, you have got to put on your “thinking hat”; that measured move that I just described, that is a minimum measured move.

Now, I can see this stock settling in a little bit, perhaps it will pause. Wouldn’t it be nice if it gave you an entry? If you made this trade you are up 2 percent today. Watch and see how it trades tomorrow. I expect it will probably move up again tomorrow just out of pure momentum. But then if the stock starts to reverse maybe you take a little bit of profits but hang on to the rest because this is the operative chart; the weekly chart should work for you.

Free Chart

Leave a Comment