As intraday traders we can be hypersensitive to every tick in our stocks, sometimes to a fault. Been there. Totally understand. I am with you. Today in V if you did not give it a chance to run then this was a spot on example. Today was a day to give V a chance.
I traded V in the afterhours yesterday after they reported. First ticks sent V down towards 71. That is not good. But then came a battle at 71. And the buyers won. And then came another fight at 72. Again the buyers prevailed. At 73 the buyers were the victors yet again. Same at 74. And before I left I noted the volume done at 74.75.
If you were paying any attention to the market V 75 was a level you could not miss.
“If V can get above 75………”
“I need to see V above 75 to add to my position.”
“I am not a buyer of V till it breaks the key 75 resistance level.”
Ok so the talking heads had offered their opinions. The charts confirmed their banter. 75 was a key level and everyone who trades professionally knew this.
V is a stock that is easy to understand. They make money when you use their credit card. Got it. Have a few of their logos in my money clip. They are about as well known a company as their is. “Visa- It’s everywhere you want to be,” comes easily to mind. They are like AAPL or AMZN. Oh wait but I foreshadow my next point (remember how they reacted after earnings?). V is ripe for those with serious money to dump more new money into if V offers a good report and can trade above 75.
And guess what? That is what we got today.
And we opened. V traded down to 74.80 and then up t0 75.20. Basically this was the above/below program right on the open. Brilliant quants, just brilliant. But then V cleared 75.20. Now there is not much to say here: “BUY!!!!!!!!!!!!!”
Not only is this a buy but please- give the stock a chance. V is not a stock with all the facts above to trade up a measly 25c after the 75.20 offer lifted. Let it run. If the market was not so weak we might have seen V 80.
This is a pattern you will see again. A well know stock, above an important long term resistance level, and breaking its opening range. Buy and hold until there is a Reason to Sell.
Dr. Steenbarger will be visiting SMB Capital tomorrow to offer a special guest lecture. Dr. Steenbarger’s presentation will be videotaped and then broadcast this Sunday on StockTwits TV. We will share more of the details later in the week. We are looking forward to his visit!
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