Looking for a pinch and pop? Here’s a look at Fabrinet (FN). (October 03, 2018)
FN
Fabrinet ( NYSE: FN ). I was looking at this stock; it first popped up on my screen yesterday, I haven’t looked at this stock in a while. A couple of years ago this was trending really nicely and then once it broke down that was kind of all she wrote.
Now if you look at this on the weekly chart you will see that 45.00 is actually a pretty solid level of support for this thing. It is right about where there was resistance last time. Strictly speaking, you can’t look at a consolidation that took several weeks, actually, I think over a month to consolidate, you can’t really look at that and say it’s a flag pattern. Those are typically really tight things that last just a few days, maybe a week max. But does it really matter?
All I am looking at here is, this is a stock that is in a pretty solid uptrend. I don’t really care about missing the first part of it; I can’t really do anything about that. But when the stock has pulled back to the 50-day moving average it has broken out pretty good. And so I am seeing that now. If you look at the daily chart, you look at the volume on this; you can see that it is just about average, definitely not low.
I took a position in this today, just a starter position. I will tell you exactly what I am doing: I’ve got my stop just a little bit below the 50-day moving average. I am not giving this a long leash; the stock has to hold above 45.00. If it doesn’t do that, okay, then I’m wrong about the trade. It doesn’t make me a bad guy. It doesn’t make me a bad trader. It just means that I am wrong about the trade so I will take my loss and move on.
This is a way to really kind of define your risk on a trade that you think is a good setup. Had I been watching this stock, and I really wasn’t, at least not close enough to take a position, the real ideal time to take a position would have been on this day, yesterday. Again, I didn’t see it and I am not going to tell you that I did. But I was looking at this this morning and I saw it start to peak out. I made an alert based on this trendline and now I am in the stock and I think it is going to do real well.
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