Reebok Clears Cup-With-Handle
The market rewarded growth Thursday,
bidding up stocks on positive news. This kind of action contributes to
the base-building process as intermediate-term momentum traders watch and wait for
high RS stocks to complete correction-recovery patterns.
Reebok International
(
RBK |
Quote |
Chart |
News |
PowerRating) leapt 2
1/16 to 23 1/4 on four times its usual trade. The stock made new 52-week
high on Thursday, fuelled by strong sales reports from retailers of athletic
footwear. The stock, incidentally, broke out of a cup-with-handle formation. Note Reebok enjoyed a 90 12-month relative strength score as of Wednesday.
AnnTaylor Stores
(
ANN |
Quote |
Chart |
News |
PowerRating) reported
that October same-store sales fell 3.4% from a year ago, but the women’s apparel
retailer said it to earn 78 cents a share in the third quarter, a penny below
estimates, according to data compiled by research firm First Call/Thomson
Financial.
All stocks, of course, are risky. On
any new trade, be sure to limit your position size and set a protective price
stop where you will sell your buy or cover your short to protect yourself
against severe losses. For an introduction to combining price stops with
position sizing, see my lesson,
Risky Business.