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May 07

Entering Long Goldman ($GS), McCormick ($MKC)

Two more longs we’ll be entering at Wednesday’s open, totally unrelated and at different stages of their uptrends.

First up is Goldman Sachs ($GS).

$GS has been in a descending channel since that 2/19 high and it’s just emerged from it in the last two weeks on good volume. Climbing above the 50-day wasn’t exactly negative either. Bigger picture I like this almost Elliott Wave-like pattern with alternating 2nd and 4th waves, I have no idea what the count actually is, but it looks like that kind of structure with the next wave underway now.

AlphaCapture

I’ve zoomed in to the last 5 months on the second chart below to show that channel in more detail. That last swing closing low at $138.60 gives a reasonably close initial stop, but I suspect just going back into that channel and breaking back below the 20 and 50-day would be enough to warn us a more complex correction was underway.

AlphaCapture

 

Next up is McCormick ($MKC).

This is in a long-term uptrend, much longer than I’ve shown here. Here’s what I like about this. Whenever I see something that’s been trending for a while, I sometimes worry about the risk if it hasn’t had a decent test of its closest averages, it might be hugging them without testing them. I would prefer to see one or two tests of the 20, one decent one of the 50, and once they’re out of the way and it’s still going it can be a while before you see it again. This is really just me saying what’s more aesthetically pleasing to me and I think that’s what we have here.

AlphaCapture

We’ve already seen a decent test of the 200-day, and a reasonable retracement from the 3/28 high. Now we’ve got a decent price support which can act as our stop, that also would have required we break the 20 and 50-day too.

AlphaCapture

 

 

 

 

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