We are back today with the second iteration of our current feature called “Shark Trading School”. As we mentioned in Monday’s “tutorial”, the focus of these columns will be to manage the business after making the stock selection.
The market received lower-than-expected employment rate data and consumer sentiment on Tuesday morning. There are minor changes from a consensus perspective, but market players are quick to embrace anything they think a friendly Fed could create.
There is some random action as market players settle for Wednesday’s news flow, including the Fed’s interest rate decision, but there is a high degree of optimism that many think is unwarranted.
With that said, I’ve been doing some short term trading and wanted to show you a familiar looking chart setup. This is a good example of what I look for when trying to find a situation ripe for injury.
Himes & Hers Health, Inc. reported that the company more than doubled its revenue in the third quarter from last year. As this is a purely technical game at this point, I won’t go into the basics.
The stock is forming a two-week base around $7.40 to $7.75. I’m looking for a new closing high move. This level is $7.80.
HIMS stock is pushing toward that level Tuesday and it could attract traders who always blink in pursuit. The stock could use more volume but is on pace to outperform.
One of the keys here is that the chart (see below) is not extended. There is a very good foundation, and the landings are relatively shallow. That suggests there is very strong support.
I started a HIMS position on Tuesday morning and will change in a very short time frame. I’ll do some scalping during the day, and if it looks like it’s going to close well, I might be a late-day buyer in hopes that other traders will find this attractive style when they do their research tonight.
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