Here’s 4 more long positions we’ll be taking: 3D Systems ($DDD), FEI Company ($FEIC), McKesson ($MCK), and Sally Beauty ($SBH). They’re all stocks we’ve been watching for a while, possessing many of the characteristics we look for; being in well-established uptrends, emerging from a recent consolidation, providing us with an attractive risk/reward entry. We’ll enter them all at tomorrow’s open.
3D Systems ($DDD)
$DDD had seen a spectacular rise into its January 2013 peak, so it was no surprise to see it suffer a sizable pullback into mid-March. It subsequently staged a strong comeback surpassing its old highs in May, since when it has put together a reasonably tight consolidation. What appeals here is how it has reclaimed the ground above the 20 and 50-day MA’s which are both rising, as well as the descending trendline from the May high, and the swing high on 6/17. In an ideal world we’d want to see more volume, but price is giving us enough of a story. Our stop needs to be wide, so initially we’d use a break of the $43.50-$42.70 level, but with a quick advance to fresh highs we should be able to move that up to around the $45 level below where the trendline and MA’s currently are. Shorter-term aggressive players could maybe use $45 at the outset.
FEI Company ($FEIC)
This is looking like the latest consolidation in what has been a solid long-term uptrend for $FEIC. It held its ground well in recent market weakness and looks ready to move higher again. We’ll use a clean break of the nearby daily/weekly closing lows of $71.31-$71.08 as our stop, giving us an attractive risk/reward trade.
$MCK has seen some volatility within its overall trend higher so we’ve been careful about timing our entry here. The recent successful test of the 50-day and the subsequent surge higher are encouraging signs that any short-term weakness may have passed. It’s also positive to see how it followed through on that move, consolidating it fairly tightly before resuming higher and taking out the 7/1 close today. That narrow band at $110.97-$110.70 can act as our initial stop, which we would hope we can move up to around $114 in due course.
Sally Beauty ($SBH)
$SBH is another one we’ve been stalking for a while but hasn’t given us the right kind of opportunity until now. The recent 4-day surge to fresh highs was very powerful, so to have seen it hold the majority of those gains in the following week or so is very encouraging. We don’t like to put too much emphasis on one day’s move, but even today’s rally from the lows on increased volume to again close above that recent breakout level is a big plus.