Markets continue to trade in a range bound pattern with the Nasdaq testing the upper edge of its range.
PH price action declined $12.23 or -3.61% finally closing above the 20 EMA. Stocks trading at higher price points such as PH ($326.00) require tighter stop limits on the lower side of the cost basis, so the stock price action doesn’t get away from us. This is why I utilized setting stop limits of 1.5% or less. In this case the stop limit kicked in at 334.20 giving us a loss of 1.45% or -$491.00 for a 100-share lot. Closing price for this stock was 326.88 preventing an additional $732.00 of loss in the portfolio.
CARR closed up 0.70% yesterday. All the oscillators are in the green. Support is at the 20-day EMA with resistance found at the 50-day SMA. Set your stop limits to defend gains based upon your individual risk tolerance.
JCI closed down 1.08%. The RSI is still above the 50 level but trending down. Support is at the 9-day SMA with resistance found around 64.63.
VCYT is another Horizons stock that just had a close above the 200-day SMA. In these cases, we want to make sure we are not getting a false positive so it’s prudent to wait for a back test to the 200-day SMA for price action confirmation.
Range-bound markets are prone to false breakouts, where prices briefly move beyond the range before reversing back within it. Exercise caution when trading breakouts and wait for confirmation before entering trades.
It’s important to emphasize that the markets are trading in a range bound trend. In a range-bound environment, the number of high-quality trading opportunities may be limited. It is crucial to be patient and selective in choosing trades.
Focus on setups that offer a favorable risk-reward ratio, align with your trading plan.
Being risk adverse, I’m just waiting on the sidelines until market conditions improve.
This information is for educational purposes and not a recommendation to buy or sell a stock.
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