Here's another one that's close to triggering my buy alert today. SAIC is a government technology contractor and should fare well under a Democrat administration. It pays a nearly 2% dividend, and I estimate forward P/E at 12-13 and forward P/S at about .8. That's an objectively attractive valuation and also leaves about 16% upside to SAIC's median multiple of the last 4 years. Analysts are a little negative on SAIC, with a 4.3/10 rating, but open interest is highly bullish, with a put/call ratio at about 0.25. Upside to the average analyst price target is over 20%.
SAIC is approaching strong support from both a one-year trend line and the 200-day exponential moving average.
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Got a nice bounce late in the day from about the level I alerted at. After market, SAIC announced that it received a Navy contract to provide torpedoes.
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Making another run at this support level again.
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Trend line briefly breached; bounce from secondary support at 86.
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SAIC reported an earnings beat, but disappointing sales and guidance, which sent it down to my lowest buy level. I picked up a couple more shares here.
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This morning's headlines:
SAIC Wins $800 Million U.S. Army Contract for Modeling & Simulation Systems Engineering
SAIC Wins $3.6 Billion U.S. Army Contract for Engineering Services Supporting Hardware-in-the-Loop and Modeling & Simulation Development
Thanks for your great analysis.
How is your method for confirmation of a specific S/R Level before entering a trade? I mean in this case it is a falling knife.
ChristopherCarrollSmith
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@SalviG, tbh, I don't wait for confirmation. The market moves too fast these days, and I don't have the time to sit and watch for reversal signals anyway. I have enough confidence in my fundamental analysis and my method for picking support levels that I pretty much just grab whatever falling knife triggers one of my alerts and don't worry too much if I turn out to be wrong. I invest largely for the longer term anyway.
SalviG
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@ChristopherCarrollSmith, sounds like a good strategy. Especially if you are a longterm Investor, the risks are quite small for stocks that have good fundamentals.
I would play such moves with a SL below the next SR Level based on the weekly timeframe. This way I have enough space for not getting stopped out by volatility on a smaller timeframe. I am also longterm...
How is your method for confirmation of a specific S/R Level before entering a trade? I mean in this case it is a falling knife.