Friday, August 15, 2008

Trade Entry: SAFM

I took a small 1/4 size pilot position in SAFM today, buying 100 shares at $43.29. This stock was highlighted in the trade report, with a buypoint in the $42-34 range.

The Setup: Breakout pullback following a strong bottoming formation. Volume pattern is solid. Stock is pulling back at recent highs. I expect a pullback to the bottom of the breakout bar, around $42. It's also possible that healthy pullback could reach the 50 MA, at $40.50. For this reason, I took a small probing position with the expectation that there could be more of a pullback. If the pullback is orderly and on low volume, I will buy more at the mentioned support levels.

Risk: Stop is under the 50 day MA with a target at old highs, around $50.

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