MA hit it’s primary target today (last posted here). I encourage you to read that last post as in it I not only said that the tag of the top of the channel would be the most objective target for the long trade, which was entered off the bottom of that channel, but that MA is also a potential sell and reverse trade (aka-stop and reverse), meaning that it is also an objective short trade off a tag of the top of that channel.
Nothing is 100% guaranteed in the market but this is why active trading can be so much more lucrative than buy and hold investing. MA, a relatively stable large cap stock at that, provided a clearly defined entry and exit point for a long side trade from the bottom to the top of that channel producing a nearly 25% gain in just one month. Now I believe that MA has a good chance of providing another 10%++ return potential as a short here down to at least my first target (T1) of the bottom of that channel or more likely, to my preferred target of T2 (last chart) shows new targets for the short trade. Wash, rinse, repeat folks. Not that the market perpetually offers such good R/R trades but even one or two trades per year like this will beat most buy and hold strategies.
Even if the short trade does not work out, an objective stop would only be about 3-8% higher, completely depending on your personal trading style and risk tolerance. An ideal stop for this this trade might be just over 430, which is 15 points, or about 3 1/2% above current levels. This gives the trade a minimum R/R of 3:1, as my first target is estimated to be around 370. T1 is the rising lower channel line so this moving target is derived from my best guesstimate from my experience. Keep in mind that although I tend to be pretty accurate with my price targets (i.e.- where a stock will go to before reversing), it is much more difficult to accurately forecast how long it will take to get there.
Original chart first, then today’s charts 2nd (showing the long trade entry & exit) and 3rd chart (highlighting the targets for the short trade for anyone interested). Also note this will be a categorized as a fully completed trade for the long closed today and both a set-up and active trade for the short trade triggered today. Keep in mind that some brokers offer “stop and reverse” trades that will allow you to simultaneously close a long and short the same stock, in the same order, thereby reducing transaction costs. I often use these order types in my trading account with Interactive Brokers but there are some other brokers that offer this type of order as well.
