In last night’s Trade Report, I highlighted commodities as an oversold bounce setup. I used POT as my primary example and entered today based on last night’s analysis.
I bought 300 shares of POT at the open at $176.31.
Setup: Oversold bounce setup, within a longer term topping pattern. Stochastics are oversold and the stock bounced off strong support.
Risk: My intial stop is under the 200 day moving average. My target is not as precise. The intial target is $195, just under the breakdown bar. However, we could see a move up to $215, around the 50 day moving average. I will likely take partial profits as each target is hit and move my stop up.
Concerns: Downtrending stock and sector. Volume could have been higher today.