Here’s my trade on Westlake Chemical ($WLK) — Well, actually, it’s IBD’s trade. (March 8, 2021)
WLK
I want to look today at Westlake Chemical ( NYSE: WLK ). Credit given where credit is due; I got a notification today that IBD, I think it was on Swing Trader, I’m not sure, was starting a position on Westlake Chemical ( NYSE: WLK ). I do my own trading research, though part of my research is looking to anybody who I think is any good. None of this stuff is patent-pending, it’s not intellectual property, it is just, let’s go make us some money and so I look at all kinds of stuff and IBD is one of them.
I wasn’t really doing much today on anything trade-related. But then when I saw this, I looked at the chart and this is what it looked like before today. A nice little squeeze here, a little bit around $90.00; I didn’t have this on my Watch List. But I looked at it immediately and went, wo, wo, wo, wo, wo wait a minute, this is something here; holding at the 50-day moving average and now a nice breakout. Wow, above 90.00, that will work. What’s the volume like?
You can see how this volume has been high here, relative to where it was back here, so this has been a high-volume along here. Plenty of demand, so far getting supply and then, boom, we get a gap out above 90.00. And then this thing kept going on the highest volume ever, well, I don’t know about ever but in quite a while. And so the stock actually gapped up and it kept going and at some point hit 95.00.
This is how I would calculate a measured move on this to see if I am interested in buying this stock. I would look at this box here, from top to bottom, and I see a pullback of $17.00, like 18.8 percent, so we will just say 20 percent. I see a pullback of 20 percent here. And so then what I will do is, I will take this box. I will draw it all the way over here. So this is the breakout here, and then I just simply raise this up, about 20 percent. Where is that going to get me? That gets me to 110.00.
So my trade on here would be, buying this breakout like I did, again, just right off of IBD’s signal, and then I am looking to get 20 points off of it. Buying it at 90.00 and then riding it up to about $110.00. That’s not going to happen overnight, it probably wouldn’t even happen this month, and you will definitely see a few zigzags along the way but I like the way this stock is trading.
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