Not a lot to do right here, right now. But………check out Service Now ($NOW) (August 10, 2020)
NOW
Service Now ( NYSE: NOW ); I have drawn these lines here, they have been here for a while. What I have really done is back here when I put these things on I extended them forward. You can see here on the 21st of July, I extended this thing forward to illustrate where the, yes, I’m okay channel is.
In other words, as long as the stock is staying within the green, which is the buy line and the red, which is the sell line, as long as a stock is staying within that range it’s all-good. And not just, it’s all good, but you want to be building your position on these pullbacks like this.
The stock isn’t even coming close to tagging the 50-day moving average, that’s a reflection of institutional accumulation. We like this, even after the stock has been going up so much I really, really like the way this is trading. And if we do just kind of a short-term trading range this is where the stock is trading. I can pull it back here and do the trading range and you can see, the stock is kind of right in the middle of this box here.
It’s not at a great entry point but it’s at a pretty good one. It’s at a pretty good one, I am just going to continue drawing lines here, if we draw this line like this, down from the last high down into where the stock is now and then we will draw another one here like this. This is what I would call, really, a pinch and pop; where you get lower highs, higher lows pinching together; it’s creating this volatility squeeze, this volatility compression.
The way you can trade this is, first of all, on the lower part, which would be kind of now or at least this morning but it’s really not too late, you would start a position and then if the stock breaks out, which this is close to doing but we don’t know whether it’s going to do that or whether it will just stay in the range for a while more. But if the stock breaks out that’s when you add to the position so you cost basis would still be back into the box, you have just kind of got an earlier start on it.
That is how you would trade this stock. But the most important thing to be mindful of is, this stock is just in an uptrend. It’s in an uptrend and this is where you want to be. You want to be in these stocks that are in uptrends. It’s fine if they test the support line you just don’t want to see a clean break down to where the stock is trading below the 50-day moving average. This is a stock that I would look at as a potential long. Right now today, a lot of stocks are just kind of marking time and they are not really giving you a lot of action signals, in other words, something to do today.
There are a lot of stocks to hold but just not too much that I am seeing is in the, okay, I have got to buy some stock today camp. So that will ultimately change but for now, that’s what I am seeing and this would be one of these.
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