Here’s your early entry on $PLMR – September 24, 2024
This is Scott McGregor at Scott Trades on Twitter with StockMarketMentor.com and your Chart of the Day. I want to take a look at Palomar Holdings ( NASDAQ: PLMR ).
Palomar ( NASDAQ: PLMR ) is an insurance company. I remember hearing about this stock in 2020, it was an IPO that just went wild. I’ve got to flip out to a weekly chart to show you the context of how big of a deal Palomar ( NASDAQ: PLMR ) was. It opened on its IPO week in the $18.00 range and ran all the way up to 118.00.
That’s just a bit of a preview, for those who weren’t around in 2020, of how crazy things actually were. Now, Palomar ( NASDAQ: PLMR ) has been in consolidation for the last couple of years here. We see this long drawn-out base. And just in, let’s say, May of 2024, broke above this clear resistance level, back-tested that level, and has since been chugging up these weekly moving averages.
Now, if I flip to a daily chart we see that same downward-sloping trendline. We see that same breakout, that same chop and slop, but eventually, a backtest that was successful. And then a resumption of this trend that has been really going on for most of the year. Where I see Palomar ( NASDAQ: PLMR ) here is, what I would call an early entry because the stock is still in consolidation.
It’s still chopping around but it’s in and around some key moving averages. For example, its 8-day and its 21-day exponential period moving average. This stock has clear support at around the 50-day moving average, that’s the red line on the chart. I could see a definite early entry with a stock on Palomar ( NASDAQ: PLMR ), even just above the 50-day moving average, right around this candle.
And then you would want to add to that position with a break above $100.00. So you are getting some started early in and around the key moving averages with clear risk defined either right around this low here from Friday or around the 50-day moving average. A close below the 50-day could stop you out of this idea. And then you’d want to add to that stock if it does break out and reward you with a move above 100.00.
Now, even if this was to just get back to its 2020 highs, that’s about 30 percent from where it is now, that’s a pretty good swing trade in my books. So keep an eye on Palomar ( NASDAQ: PLMR ) as it consolidates in and around the 8 and 21-day exponential period moving averages. And then watch for an early entry, and then a breakout above that key $100.00 level.
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