The market is red-hot today after it received dovish comments out of the Federal Reserve Bank yesterday.
That said, there are plenty of opportunities to look at. And I’m not here to waste your time, so here you go:
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Check out this daily chart in Wayfair Inc. (W).
At first glance, what do you see?
It might just look like a few lines to you… but to me, this is a cup and handle pattern, which is considered a bullish pattern.
With this price action, we’re looking for the stock pull in, find some support… and run higher, making a “U” shape, which forms the “cup” portion of the pattern. Next, we look for a slight downward drift in the stock, a small downtrend if you will… this forms the “handle” portion of the pattern.
Now, do you see that blue horizontal line?
Think of that almost as a lid (we refer to it as resistance). In other words, this stock has had a tough time breaking above that price level.
But what happens if the stock breaks above that?
Well… it gets momentum and tends to continue higher.
That said, with W, I’m looking to buy the stock between $163.33 to $166.01 (when the stock is above that blue horizontal line.
With this stock, it’s pretty volatile, so my stop will be at $153.11 (as always, I’m not risking more than 2% of my portfolio on this trade).
For my first target, I’m looking to sell at $173.57 (right around the next level of resistance). Thereafter, I’m going to monitor two lines (the 3 and 8 EMA on the daily chart).
The next trade I’m looking at is actually a breakout setup.
Check out the daily chart in Okta Inc. (OKTA).
OKTA has been on a remarkable run… and it’s actually testing a breakout level.
If the stock breaks above that blue horizontal line… it could gain momentum, as more buyers demand shares… which should lead to new highs.
I’ll be looking to buy this stock between $132.42 to $135.06.
My stop will be relatively tight and set at $126.29.
For my target, I’ll be monitoring the 3 and 8 EMA on the daily… if those lines give me a signal to sell, I’m out.
My next trade idea is similar to OKTA… it’s testing a breakout zone.
Check out the daily chart in Zscaler (ZS).
This blue horizontal line is a previous resistance level… and it’s trying for a third time to break above it.
Now, this stock conducted its initial public offering not too long ago… and if ZS breaks above this breakout zone, it’ll be at all-time highs… which tends to attract momentum traders… in turn, causing the stock to run even higher.
That said, my buy zone is between $80.20 and $81.12… with this trade, I’ll be monitoring the volume closely. In other words, I want to see the stock start to break above that with some heavy trading activity.
My stop will be set at $77.09… once it trades below that, I’m out.
Again, with this trade… I’ll be monitoring the 3 and 8 EMA on the daily chart for my targets.
If I make any moves in these stocks… I’ll be sure to let my clients know about them in real-time. I’ll also be active in the chatroom today with gold getting a nice pop in the after-hours last night… I even made a video talking about that action, which I sent out to my clients.
A positive attitude is essential if you want to be successful in life and the stock market. I didn’t seriously involve myself with trading until my 50s… but that never stopped me from believing that I could do this. Want to find out more about me? Watch this exclusive interview now.