Check out this chart of Restoration Hardware ($RH). (February 11, 2020)
RH
I want to look at Restoration Hardware ( NYSE: RH ). This is a high growth company believe it or not. You guys have been in their stores, they have good stuff in there and they are very proud of it, they charge a lot of money for it. This stock has been in an uptrend, for a while, close to a year, but it has been trading sideways for the last few months, almost 3 months.
I am looking at this and I see the volume over the last couple of days; I think this stock is just starting to get going and it is going to start the next leg higher. I like the fact that for 2 days in a row this stock has traded up and it has closed near the high of the day. I am looking at 240.00 as the next viable resistance level and that will probably be at least tested tomorrow.
I would suggest if you are long this stock, and I am, I actually first bought it yesterday, I would stay long this stock and maybe give it, you have got to give it some kind of room, maybe 8 percent or so even a little bit more. But start a position, I don’t think it’s too late. If the stock happens to pullback tomorrow and them find some kind of support right around there, then that would be a good place to start the position.
What you have to remember is this, this kind of buying, really big buying for 2 days in a row, after this kind of a consolidation this isn’t the kind of thing that is just like a 2-day wonder and then the stock is going to tank. This reveals that there is some real buying interest in this stock. And that tells me that if the stock pulls back at all you are going to see some support right around here. So you have a defined risk trade, where you are buying here, you are keeping a stop right down around there and you are looking for this kind of move.
Free Chart