There are two ways to buy New Oriental Education ($EDU). Maybe you can buy it both ways! (June 25, 2019)
I want to look at New Oriental ( NYSE: EDU ) here and this is why: If we start with the weekly chart you can see this stock has had a heck of a ride, but this year it has really been kind of building up a base. I am looking at $100.00 as a real clean breakout level. That’s $8.65 or whatever it is above where it is right now so I want to zero in on this a little bit better and that’s right here at 96.00. There is no way I would be buying EDU ( NYSE: EDU ) here at this level. It is still in congestion, it’s right where it was lord knows how many times in the past, just look along this level.
I want to find either the perfect entry where the stock pulls back here and holds support right around 88.50 or so. If it does that, that would be a good entry BECAUSE I could then, based on my idea and my reason for buying on this little pullback to the 50, I could keep a super tight stop. So I am basically not risking anything IF I can get a good entry right on the bounce, boom, I’m in and then look for the stock to move up. So I’ve kind of got like $5.00 in profit on the trade before I even know whether the stock is going to break out or not.
Alternatively, look, we just wait here and wait for the stock to run up, say, $95.00 or so, maybe $96.00 and then that is when you look to enter the trade. This is an IBD 50 stock so Investors Business Daily covers this and they will typically print good articles about it, which helps, it’s nice when the retail guys are in there.
I would look for more upside on this, BUT, either wait for a little pullback and get a really good price or a breakout. One of the two is going to happen and hopefully, BOTH of them will in that order. A little pullback for an initial entry and then a break out for a bigger position.
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