Pimp My Trade

Trade Idea: REGN

Posted on February 25, 2009 by Adam

I just bought stock in REGN. Here’s why.

First, look at the candlestick chart. It’s been holding up lately, putting together some higher lows. You could make the case for an ascending triangle here, where prices are resting right at support. Add to that the fact that it’s been up or break-even the entire day, on a day when the broader market is weak. That’s clear relative strength. I’m liking it.

An ascending triangle, with prices resting right at support.

Now have a look at the point and figure chart. If you watched my PNF tutorial, you will see that this is exactly the type of setup I look for. It’s low risk, since we are resting right at a support level, and high probability since we have retreated right to the bullish trendline. On top of that, it’s on a buy signal. What more could you want? I got it at 17.30, and it goes on a sell signal at 17 exactly. That’s only 30 cents of risk! My price target is 20, or 2.70 of reward. According to those criteria, I only have to be right 10% of the time on this trade for it to pay off. I’ll take those odds.

This is a low risk high probability trade, since we are sitting right at support and are right at a bullish trendline.

Put the candlestick setup and the PNF setup together and you have a great trade idea. It’s not too late for you to get in either. Just buy and set your stop at 17. Easy trade!

Happy Trading