Market indexes pulled back today with a gap down and a closer lower. A lot of strong, trending names have been pulling back into the 20MA and I wanted to go long a stock with the best looking setup. FTNT has been on a powerful uptrend for the three months since breaking out in November 2019. FTNT tests and holds the 20MA three times within this recent trend. Today FTNT gapped down and made a nice high volume hammer though the 20MA and closed above it. This is called the Holy Grail trade. One of the key factors in the Holy Grail trade is to find trending stocks with strong fundamentals. FTNT has a solid fundamental rating on IBD and has strong earning/sales growth making FTNT a high growth stock.
Entry - 114.45
Stop Loss - 111.60
Target 1 - 120
Target 2 - 125
I will continue to hold FTNT until the stock closes below the 20MA on the daily chart.
Note - Despite many quality names having the same setup today, I only took a nibble at one encase the markets choose to continue the downside momentum. Market movement will affect this trade. I do believe we are currently at short term oversold conditions and the prospects of a bounce are strong technically.
Entry - 114.45
Stop Loss - 111.60
Target 1 - 120
Target 2 - 125
I will continue to hold FTNT until the stock closes below the 20MA on the daily chart.
Note - Despite many quality names having the same setup today, I only took a nibble at one encase the markets choose to continue the downside momentum. Market movement will affect this trade. I do believe we are currently at short term oversold conditions and the prospects of a bounce are strong technically.
Comment:
Nice push on FTNT today. Took profits at 117.40 and moved stop loss below today's low. Still holding 3/4th size.
Trade closed: stop reached:
I tightened up my stop loss to 116.50 yesterday and got stopped out early this morning. With the big gap down, SPY was looking bearish, however SPY went red to green today . This is clearly CHOPPY market conditions. It is unfortunate I got stopped out even though markets are not falling yet. Stops may have been too tight on this.
Comment:
Tightening stops were warranted. The multiple stop loss hits this week was probably a warning sign for choppiness to come. Tightening stops when market show weakness is a SMART THING TO DO! There's always that saying, "If you are unsure, just get out. You can always get back in later."