Why I Bought PRFT Yesterday
Ragin' Cajun from over at Madstocks left me a comment wondering what made me purchase PRFT yesterday literally minutes before it broke out. I have traded PRFT for several years, and follow the stock regularly, but it came up on a screen for stocks getting ready to make 52 weeks highs. Once I pulled the chart up, I noticed it had made a nice symmetrical triangle, and had undergone 2 months of consolidation. My trading plan was to give it 3 days to challenge the resistance formed at $21.00. Well it tackled that area first thing yesterday morning. Also note in PRFT's chart the volume drop during the consolidation, and see how it ramps up the last 2 days before the breakout.
You can see a lot of my purchases, TIE, QCOM, for example, are at areas of resistance. My hope in making these types of purchases is that they overcome the resistance area, which will give me a new area of support to guage stops, strength, etc.
Also note my posts a week or so ago on CNMD (look for the label) and notice that it has also broken out above resistance.
2 comments:
Be carefule with TIE. I'm a relatively new trader, so I might not be reading the chart right, but do you think that it might be painting a bear flag?
BTW, my DNDN trade is still going strong. Was nice to see +40,000 in my account almost overnight :) I'll probably stay in it until FDA approval and ROW (rest of world) partnership agreement.
I think for a bear flag, the stock needs to be in a downtrend. TIE broke the downtrend some time ago. It is not near a perfect setup, as it is wedging on decreasing volume. However, these less-than-perfect setups don't scare me as I have no problem dumping them quickly if they do not behave as I expect them too.
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