Coiled Springs For The New Week
Many stocks have gone straight up in the last week, increasing risk of entry because a downturn could start at any time. To lower the added danger, I’ve built of list of coiled spring patterns, which are stocks that have tightened up at near breakout levels, but still haven’t started to run higher. These offer two advantages. First, rallies often expand into these issues as hot money takes profits on big movers. Second, tight stops can be placed just under recently traded levels, making any losers easier to take.
The market is grinding out a bunch of decent looking coils right now. Here are eight that look promising this morning:
- Ashland Inc (ASH)
- Blackrock Incorporated (BLK)
- Bank Of Montreal (BMO)
- Ctrip.com International (CTRP)
- Discovery Communications (DISCA)
- Juniper Networks (JNPR)
- Riverbed Technologies (RVBD)
- Starent Networks (STAR)
Juniper rallied into an unfilled September gap at 24 in early June and dropped into a sideways pattern. It returned to the high last Wednesday, and has tightened into a coiled spring right at the breakout level. A rally here could reach the 2008 high near 30. The company reports earnings on Thursday.
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