Forget the Lazy River, Let’s dive into $POOL – July 7, 2021

by DAN POOL 
This is Scott with your Chart of the Day. I want to take a look at Pool Corp ( NASDAQ: POOL ). While Pool ( NASDAQ: POOL ) isn’t immune to regular market volatility, as you can see it’s been a wild ride up above the 50-day moving average, down to the 200-day moving average and then a little consolidation.

Once this stock gets going, if I zoom out, you can see it pretty much just kind of hugs its major moving averages. Now, of course, that’s outside of the market volatility. Recently, Pool ( NASDAQ: POOL ) has had a really nice move off of the 50-day moving average. It made a 28 percent move, consolidated for a few months, and now it is starting to get going again.

Now, while the market is making new highs, Pool ( NASDAQ: POOL ) is also making new highs. Those are the kind of stocks that I like to be involved in. I like to be involved in stocks that are near their highs, not necessarily near their lows when the market is chugging along and that is what Pool ( NASDAQ: POOL ) is doing here.

You can see we have a nice little sideways base of consolidation. And while it does dip down below that daily 8 exponential period moving average it has really, for the most part, held above this little pivot here. You can see how this area acted as resistance, a dot above, did it on good volume. It came back for a little test and so far hasn’t looked back.

Now, from a fundamental standpoint, Pool ( NASDAQ: POOL ) looks really good as well. You can see here on this MarketSmith chart that Pool ( NASDAQ: POOL ) has pretty good earnings and sales, 50 percent last quarter, 40 percent the quarter before. It’s in a good group, it has great RS. Its estimates for 2021 are pretty high, and if I flip to the weekly chart it even has a little bit of short interest, not a lot, but the fact is Pool ( NASDAQ: POOL ) is kind of a low float stock.

This is something that I think could be really interesting for someone who wants a position in a stock that isn’t really dramatic outside of normal market volatility. What you could do is just watch for a little pullback bounce off of that daily 8 exponential period moving average. And then you would want to, potentially, size your position and give it down to the 21-day EMA, that’s about a3-1/2 to 4 percent risk level. And then just kind of float along the lazy river. So keep an eye on Pool ( NASDAQ: POOL ), I know that I will be.

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