I was rolling through some charts today and thought I would throw this one on the blog as a mystery.The top box is the SCTR, the bottom is the price.
This stock was stuck in a range. It was dead money for months. It made a breakout above resistance in late December to $76.50, but the SCTR stayed in a downtrend. The week of February 2013, it broke out to new highs again. The difference? It moved into the top 25% technically the same week.
The follow through was huge. So scanning for the 52 week high was valuable, but it was much more valuable when it started to gain strength technically. Either would have been an OK buy, but the second move was what we scanned for yesterday. This was also when the institutions started to love it. It has not quite doubled this year, but the break above a $76.50, would have generated a 75% gain.
What is the mystery stock? Some tech company? No it is not. It is an industrial company.
How about BA? Yes it's Boeing. Based on the charts, it looks more like Boing, as it bounces higher and higher.
Anyway, the next article in the series is how to find these stocks on pullbacks, if you didn't take the initial trade on the entry signal. Hope you'll tune in.
Good trading,
Greg Schnell, CMT
