Here’s my take on $PAYX – March 26, 2021
PAYX
I want to look at Paychex ( NASDAQ: PAYX ) today. This about a textbook cup and handle; I have been looking at this for a while in the premium section here. I think I have actually posted it once on our Free Chart stuff.
I want to show you this because this is a pretty interesting situation. First of all, the stock gapped up and ran to $100.00 here. Then ultimately, it fell back 14 percent before finding a base. Now, a 14 percent pullback is definitely fine for establishing a cup and handle, the cup pattern. If it falls a lot further than that then it is really not a cup it is just a sell-off trying to regain stuff here.
This thing falls about, we will call it 15 percent, and then it comes back up to form what is starting to be a low handle. In other words, the high here was only 98.60, so it’s a couple of bucks less than this $100.00 mark from back here in December, so that’s a low handle. I actually prefer the low ones because you can get in at a cheaper price.
We first were looking at this here; this was the first entry here on this pullback. So you are in, we will call it right here at the top at 96.50. You are not making much money right now, but you are getting a feel for the pattern. And so then the next entry is here, this was yesterday when the stock ran up above the prior day’s intraday high. And then finally, your next entry is today.
I don’t really think this is too late for you to be buying this stock. It would have been nice to get in when we were first looking at it here. But the way, then, that you want to create a measured move, what’s the minimum I expect to make? So it’s about 16 percent, depending on where you want to start, from below or above, we’ll say the fall was 15 percent.
So then we look here and measure up 15 percent starting at $100.00. Magically, it is $115.00, that math thing is, you know. And it’s the same for everybody, sorry; 15 percent, 1.15 percent of 100 is $115.00, it doesn’t matter what you look like in the mirror. So the price here, the price target is $115.00. So you are buying it here and you are risking a little less than $5.00. You can buy it here and put your stop just below this low right here.
And so this is how I would frame this trade. This is how I have it framed. I am in this trade in just the way that I described it for you here. In light of the way the market is kind of so choppy and weak and all of that, this is a stock that is doing really well and I think it’s going to run higher.
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