Fundamentals
Technicals
Trade
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- And it is not just the base, the fundamentals are also robust.
MUSA
has immense amount of sales and even with the price rise we have seen, the P/S ratio is still staggeringly low at 0.4. The P/E ratio is also low at 13.
- The reason behind the stellar share price performance is mainly the consistent growth in sales, regardless of market conditions, the stock has outperformed.
- The reason why the stock is not even higher is two-fold: (i) very low profit margins, capturing only 2.6% of sale as profits and (ii) high debt with debt/equity ratio at 2.22
- However, the firm has been defying expectations for a while in constantly beating estimates, hence the share price
- And with that chart setup, it seems like continuing further
Technicals
- Hard to say anything bad about this setup. I have been watching investors building this base, buying every dip and forming robust fundamentals for the past year.
- The price clearly broke out of the base a couple days ago with volume and no resistance, ending the day at the highs.
- This is one of my favourite setups and rarely fails (for demonstration, look at my past trades). I am not going to provide more evidence in terms of indicators and patterns, I have been watching the price action for 6 months, knowing the stock intimately, and this break looks very convincing.
Trade
- The air is not completely clear until I see some continuation going ahead, but that could mean sacrificing returns, hence I went long on the break.
- However, I have to caveat that if there is a sign of turning around and making this a fake breakout, immediately sell
- A pullback to the entry point is allowed, but once we start breaking lower or lacking continuation, it is a sell signal
- The trade is still good to enter here, but one can wait for a pullback to buy in. However, that would mean risking the trade gets away from you.
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If you like my content, Please leave a like, comment or a donation, it motivates me to keep producing ideas, thank you :)