Hey Gang! I’ll work out some kind of a standard format for my posts soon, but I would always like to present a trade together with a plan for the stop, profit, and target.
I don’t have a ton of time so here’s the trade. Healthcare is the 2nd strongest sector determined by its bullish percent index rank (currently at 84% P&F buy signals). It’s a simple, but effective way to rank sector strength. The only stronger sector is utilities at 89% P&F buy signals. If you’re not familiar with Point & Figure charting, it’s basically a way of taking time out of the chart and displaying only the price moves. Being on a P&F buy signal means that the chart is making higher highs and higher lows.
I looked at the top 10 holdings for XLV and JNJ stood out for me as being in strong condition and a stone’s throw from its highs. It is clearly making higher highs and higher lows within an established channel and has broken a short-term downtrend line. Details are on the chart, but this trade risks approximately .50c to make $6.
STOP: 138.86 if below at EOD. Immediate stop on channel break.
PROFIT TARGET: If you would like to take some money off the table during the trade, $143.13 would be a good option. Sell 1/2, keep the rest for $145.32.
FINAL TARGET: $145.32 to sell all or remaining.