Weekly charts are my default view when analyzing any stock. Although I use shorter time frames to determine my trade entries and exits, weekly charts going back a few years, are what I primarily base my trade decisions on. Before considering any stock, I first review the weekly chart. The reason is simple – I can quickly assess the longer-term trend in the stock to see if it’s something I want to own. I don’t want to fight the trend, because it’s a fight I know I won’t typically win. In addition, I can see if there may be any potential overhead resistance areas that might be missed when only looking at shorter time frames. Most of my mistakes and missed profits in trading have been caused by being too short-sighted. This is why I now choose to look at the bigger picture using a longer time frame first when examining potential entries.
The markets have been very hot lately. Many indicators show “overbought” conditions on the major indexes. Accordingly, many stocks seem extended and outside of buy zones I’d consider. This by no means they can’t continue to push higher but I like to know my risk (i.e. my stop) before entering any trade. When stocks are extended, my stop areas are too far below the current prices. As such, these do not have the risk / reward characteristics I prefer. That being said, there are so many great setups out there right now. Here’s a few of the weekly charts that have my attention going into the new week:
I currently owns a few of these names (ZAYO, TVPT, COLM, and BRKR) with stop areas slightly below the highlighted areas but have included them here as they still look to be in a buy area. Also, it’s important to note earnings season is in full gear so please be aware of reporting dates before considering any of these.
Thank you and take care.