Let’s follow up on Scott’s $WWE idea from last month – October 4, 2022
WWE SPY
This is Scott with your Chart of the Day. I want to follow up on an idea that I shared with you on September 22nd, that’s this day, right here, on the chart. It is World Wrestling Entertainment ( NYSE: WWE ).
On September 22nd I noted that WWE ( NYSE: WWE ) was holding a pretty important upward sloping trendline on the chart. You can see how it tested it multiple times, right there, right there, right there, right there, and then it did it a few more times before breaking out. And so I just want to follow up and say that if you took this idea and you are still holding this stock it should not be a loss at this point. You should definitely be ratcheting up your stops or selling into this strength.
One thing that really catches my eye is the fact that this stock was holding around some key moving averages when the overall market ( NYSEARCA: SPY ) was still in a clear downtrend. What we call that is relative strength. So we want to pay attention to stocks that are holding up when the market is bad. Because the idea is, then when the market does or if it does turn around, those stocks are holding up key moving averages have the potential to really make some outsize moves.
And that is kind of what we saw here on WWE ( NYSE: WWE ). Where it just kind of went up off the 8-day exponential period moving average, up almost 9 percent, in a straight line, in four days. And so this is just a classic example of not giving up on things when the market is bad. But also paying attention to stocks around their key moving averages.
This gave you multiple opportunities to get in, and even if you got shaken out on one of these fake-out days it gave you an opportunity to get back in and it firmed up. So again, I just want to follow up and say congratulations if you took this trade idea. They don’t all work but this one did.
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