{"id":4608,"date":"2019-09-17T18:00:40","date_gmt":"2019-09-17T22:00:40","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=4608"},"modified":"2022-12-27T22:56:17","modified_gmt":"2022-12-28T03:56:17","slug":"low-risk-stocks-bull-market","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/","title":{"rendered":"How To Identify Low Risk Buy Points In A Strong Uptrend"},"content":{"rendered":"<p>The following article was initially published back on August 17th, 2016 and titled,\u00a0<em>Here&#8217;s A Low-Risk Way To Buy Leading Stocks In A Runaway Bull Market<strong>.<\/strong><\/em><\/p>\n<p>However, as we&#8217;ve mentioned before, we enjoy going back to certain older blog post to highlight some of the timeless trading strategies and insights.<\/p>\n<p>As with the stock market, market conditions seem to cycle and repeat themselves every few years.<\/p>\n<p>In this article, we&#8217;ll take a look at how to identify low risk buy points in a strong uptrend.<\/p>\n<p>We hope you find this article insightful and valuable with some of our timeless trading strategies and insights.<\/p>\n<p>Happy Trading!<\/p>\n<p><strong>Original Post:<\/strong>\u00a0<em><strong>Here&#8217;s A Low-Risk Way To Buy Leading Stocks In A Runaway Bull Market<\/strong><\/em><\/p>\n<figure id=\"attachment_4613\" aria-describedby=\"caption-attachment-4613\" style=\"width: 300px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.dailymail.co.uk\/news\/article-3096105\/Lion-climbs-tree-escape-herd-buffalo-Kenya-king-jungle-left-tail-legs.html\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4613 size-medium\" title=\"Click image to see the original of this incredible shot -- but read this blog post first! ;-)\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/lion-climbing-tree-300x225.jpg\" alt=\"image \u00a9 Charles Comyn \/ Barcroft Media.\" width=\"300\" height=\"225\" \/><\/a><figcaption id=\"caption-attachment-4613\" class=\"wp-caption-text\">A runaway bull market?<\/figcaption><\/figure>\n<p>With the NASDAQ in a raging\u00a0bull market and trading\u00a0at fresh all-time highs, you may be tempted to\u00a0chase the price of leading stocks in fear of missing out on the <strong>next monster gainer.<\/strong><\/p>\n<p>At one time or another, you probably\u00a0have\u00a0paid up to\u00a0buy a hot stock that &#8220;can&#8217;t miss&#8221; and promises to deliver a <span class=\"__postbox-detected-content __postbox-detected-date\">20-40%<\/span> gain in\u00a0just a day or two.<\/p>\n<p>It&#8217;s okay; I have occasionally been guilty of this too.<\/p>\n<p>Once in a while, buying at seemingly &#8220;overbought&#8221; levels\u00a0actually works, even for new traders operating in their first bull market (ignorance is bliss).<\/p>\n<p>However, I have learned from nearly two decades of trading experience that <strong>undisciplined buy entries will eventually be punished,<\/strong> and you will quickly be put into place by the trading gods.<\/p>\n<p>Although all momentum traders <em>should<\/em> know better, chasing the price action of surging stocks is a major issue that continues to dog the performance of traders&#8217; portfolios.<\/p>\n<p><strong>What you really need is&#8230;\u00a0<\/strong>a <em>low-risk<\/em>\u00a0method of buying leading\u00a0stocks in a nosebleed bull market.<\/p>\n<p>Fortunately, I have\u00a0a simple and effective solution for this dilemma that I&#8217;m excited to share with you here.<\/p>\n<p>If you&#8217;re a short to intermediate-term swing trader of stocks, <em>keep\u00a0reading<\/em> for juicy details that will put you on the path to\u00a0<strong>greater trading profits with less risk.<\/strong><\/p>\n<p>Also, be sure to read all the way to the end, where I analyze\u00a0the charts of <strong>two fiery\u00a0stocks now setting up <\/strong>for potential buy entry.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Discipline_Pays_Dividends\" >Discipline Pays Dividends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Start_With_The_%E2%80%9CBig_Picture%E2%80%9D_View\" >Start With The &#8220;Big Picture&#8221; View<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Simply_The_10-Week_MA\" >Simply The 10-Week MA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#The_Nitty_Gritty\" >The\u00a0Nitty Gritty<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Steer_Clear\" >Steer Clear<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#_All_Clear_Here\" >\u00a0All Clear Here<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#The_4-Question_Checklist\" >The 4-Question Checklist<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Put_These_Two_Stocks_On_Your_Watchlist\" >Put These Two Stocks On Your Watchlist<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Carecom_CRCM\" >Care.com ($CRCM)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#RealPage_RP\" >RealPage ($RP)<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/morpheustrading.com\/blog\/low-risk-stocks-bull-market\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Discipline_Pays_Dividends\"><\/span>Discipline Pays Dividends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure id=\"attachment_4619\" aria-describedby=\"caption-attachment-4619\" style=\"width: 200px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4619 size-full\" title=\"yoda\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/yoda-is-disciplined.png\" alt=\"yoda-is-disciplined\" width=\"200\" height=\"240\" \/><figcaption id=\"caption-attachment-4619\" class=\"wp-caption-text\">Lose your ego and get disciplined, you must!<\/figcaption><\/figure>\n<p>Although it may seem obvious, you must realize <em>personal discipline and patience<\/em>\u00a0are key ingredients to my delicious<strong> recipe for buying\u00a0leading stocks <\/strong>while\u00a0the market keeps rallying to new highs.<\/p>\n<p>If you are a\u00a0new trader, simply following the <a href=\"https:\/\/www.morpheustrading.com\/best-swing-trading-strategy\" target=\"_blank\" rel=\"noopener\">rule-based approach<\/a> of our proven trading system can immediately stack the odds in your favor, while also improving your chart reading skills.<\/p>\n<p>If you&#8217;re an\u00a0intermediate to advanced trader who is struggling with discipline, you may need to<strong> check your ego at the door <\/strong>in order to\u00a0quickly improve and return back to good form.<\/p>\n<p>As a trader, you must learn to deal with the unknown in order to be a successful stock market speculator.<\/p>\n<p>But dealing with the unknown means many elements of stock trading are beyond your\u00a0control.<\/p>\n<p>As such, you\u00a0must therefore <strong>focus on what you\u00a0<em>can<\/em> control,\u00a0<\/strong>which is your buy entry point.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Start_With_The_%E2%80%9CBig_Picture%E2%80%9D_View\"><\/span>Start With The &#8220;Big Picture&#8221; View<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When I was a new trader, I made the mistake of spending too much time focusing on the daily and intraday chart time frames.<\/p>\n<p>It seemed logical because those 15-minute, 60-minute, and daily charts clearly showed me where the action was.<\/p>\n<p>However, I eventually realized that longer-term<strong>\u00a0<em>weekly<\/em> charts did the crucial job<\/strong> of smoothing out day to day price volatility and presenting an objective &#8220;big picture&#8221; of the dominant trend.<\/p>\n<p>Therefore, if you&#8217;re not already doing so, you should immediately add\u00a0the analysis of weekly chart time frames\u00a0to your trading arsenal.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Simply_The_10-Week_MA\"><\/span><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-4638 size-thumbnail\" title=\"We like to KISS\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/kiss-method-110x77.png\" alt=\"KISS methodology\" width=\"110\" height=\"77\" \/>Simply The 10-Week MA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As an avid believer in applying the <a href=\"https:\/\/en.wikipedia.org\/wiki\/KISS_principle\" target=\"_blank\" rel=\"noopener\">KISS methodology<\/a>\u00a0to trading, I\u00a0primarily base my weekly chart analysis\u00a0on the 10-week moving average (10-week MA).<\/p>\n<p>Nearly the same as a 50-day MA (on a daily chart), the 10-week MA does a stellar job of showing you the <strong>intermediate-term trend in relation to the longer-term trend<\/strong> of a weekly chart.<\/p>\n<p>To avoid chasing buy entries, you merely\u00a0scan\u00a0for charts where the price action is <em>not<\/em> extended too far above\u00a0the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span>\u00a0MA.<br \/>\nIf it is, then you should simply\u00a0pass on the setup.<\/p>\n<p>For example, if the weekly chart is showing a share price gain of 30-40% or more over the past 4 to 5 weeks, and the price has <em>not\u00a0<\/em>touched the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> moving average during that same time period, you should forget about buying now\u00a0and move to the next chart.<\/p>\n<p>You might think\u00a0that trading has to be more complex than this, but I assure you this<strong>\u00a0&#8220;no nonsense&#8221; method of stock picking <\/strong>is\u00a0powerful <em>and<\/em> effective.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-4614\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/einstein-quote.jpg\" alt=\"einstein quote\" width=\"400\" height=\"136\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/einstein-quote-110x38.jpg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/einstein-quote-300x102.jpg 300w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Nitty_Gritty\"><\/span>The\u00a0Nitty Gritty<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the words of 20th century adman\u00a0<a href=\"https:\/\/www.nytimes.com\/1996\/04\/07\/magazine\/on-language-worth-a-thousand-words.html\" target=\"_blank\" rel=\"noopener\">Frederick R. Barnard<\/a>, &#8220;One picture\u00a0is worth ten thousand words.&#8221;<\/p>\n<p>So, let&#8217;s look at the weekly charts of some hot stocks to show you in detail\u00a0how the\u00a010-week moving average can help\u00a0keep you determine the most ideal time to buy.<\/p>\n<p>Below, I have also shared with you my<strong>\u00a0handy 4-question checklist for buying,<\/strong>\u00a0as well as my analysis\u00a0of two stock charts\u00a0currently setting up for actionable breakout entry.<\/p>\n<p>But first, here are the charts of a few strong stocks that you would <em>not<\/em> want to buy now, based on my previous explanation of the 10-week MA being overextended.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Steer_Clear\"><\/span>Steer Clear<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Tempting traders with a 150% gain over the past five weeks, Chinese internet stock Yirendai ($YRD) has been on fire, but presently offers\u00a0a negative risk to reward.<\/p>\n<p>As of the second week of <span class=\"__postbox-detected-content __postbox-detected-date\">July,\u00a0$<\/span>YRD was trading more than 30% above its\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA, and it has remained at least 20% above it since then.<\/p>\n<p>Buying at such extended levels could certainly yield more upside, but the risk of a significant near-term correction gives the trade an unappealing <a href=\"https:\/\/www.tradeciety.com\/how-to-use-risk-reward-ratio-guide\/\" target=\"_blank\" rel=\"noopener\">risk to reward\u00a0ratio<\/a> at current levels:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Yirendai stock chart\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160816YRD.png\" alt=\"$YRD WEEKLY \" width=\"660\" height=\"547\" \/><\/p>\n<p>If a stock had a huge move over the past week or two, it may seem obvious that it&#8217;s too far extended to buy now, but make sure you are looking back further, in order to see just how extended the stock really is.<\/p>\n<p>Case in point is recent IPO Acacia Communications ($ACIA), which broke out on the week of July 12 to close 40%\u00a0above the first print of its\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> moving average.<\/p>\n<p>At that point, the stock was already extended and needed a few weeks of sideways action\u00a0for a low-risk buy entry to develop.<\/p>\n<p>That consolidation followed and the stock broke out again, making it once again too extended to buy now:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Acacia stock chart\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160816ACIA.png\" alt=\"$ACIA WEEKLY \" width=\"660\" height=\"547\" \/><\/p>\n<p>The two examples above may seem obvious to you, but many traders nevertheless\u00a0buy stocks even when they are\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">20 &#8211; 40%<\/span> or more above their\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA.<\/p>\n<p>While it will work once in a while, such buy entries immediately <strong>put you in a position of weakness<\/strong> and should be avoided (go to Vegas if you want to shoot craps).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"_All_Clear_Here\"><\/span>\u00a0All Clear Here<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Since the idea is to avoid buying stocks that are too far extended above their 10-week moving averages, when exactly <em>should<\/em> you buy strong stocks based on the weekly charts?<\/p>\n<p>Generally, the best entries present themselves when an uptrending\u00a0stock is<strong> consolidating in a tight range, near\u00a0its 10-week MA.<\/strong><\/p>\n<p>Weibo ($WB), another Chinese tech stock, has been trending nicely and is an excellent\u00a0example of how the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA can help to provide you with low-risk buy entries of strongly uptrending stocks.<\/p>\n<p>Before going on a big run in recent\u00a0weeks<span class=\"__postbox-detected-content __postbox-detected-date\">,<\/span> $WB formed two tight-ranged consolidations just above its\u00a0rising <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA.<\/p>\n<p>Highlighted on the chart below, notice the bases of consolidation that formed in May, and again in June, before the stock zoomed higher over the past few weeks:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Weibo stock chart\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160816WB.png\" alt=\"$WB WEEKLY \" width=\"660\" height=\"547\" \/><\/p>\n<p>Although\u00a0$WB is currently too extended to buy now, the preceding consolidation patterns from May and June, with the 10-week MA just below, gave the &#8220;all clear&#8221; signal before the stock began surging higher.<\/p>\n<p>Again, you should avoid charts where the price is extended far above the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA and hasn&#8217;t touched it for several weeks or more; wait for a better setup to develop and move to a different stock.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_4-Question_Checklist\"><\/span>The 4-Question Checklist<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Here are four easy questions to ask yourself when evaluating the weekly chart of a potential stock to buy:<\/p>\n<ol>\n<li>Has\u00a0the weekly chart been in an uptrend for the past few months?<\/li>\n<li>Is the weekly chart in consolidation mode (4 or more weeks sideways)?<\/li>\n<li>Is the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA near the current price of the stock?<img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-4616 size-medium\" title=\"trading-checklist\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/trading-checklist-300x300.png\" alt=\"trading-checklist\" width=\"300\" height=\"300\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/trading-checklist-300x300.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/trading-checklist-110x110.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/trading-checklist-120x120.png 120w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/trading-checklist-50x50.png 50w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/li>\n<li>Is the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA trending higher?<\/li>\n<\/ol>\n<p>Additionally, right before a stock breaks out and rockets higher, there is typically a period of volatility contraction and\u00a0declining volume within the base of consolidation\u00a0(learn about basing and consolidation\u00a0patterns <a href=\"https:\/\/www.morpheustrading.com\/blog\/best-stock-breakouts\/\" target=\"_blank\" rel=\"noopener\">here<\/a>).<\/p>\n<p>If you can answer &#8220;yes&#8221; to the checklist questions above, <strong>you may have the next big winner<\/strong> on your hands.<\/p>\n<p>This is especially true\u00a0if you fine tune your buy entry by drilling down to shorter time frame analysis (<a href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\"><em>The Wagner Daily<\/em><\/a> is\u00a0handy for this).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Put_These_Two_Stocks_On_Your_Watchlist\"><\/span>Put These Two Stocks On Your Watchlist<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As promised, here are two stocks that are primed for buy entry based on my 4-question checklist above.<\/p>\n<p>Stick them in your trading watchlist now, so that you <strong>don&#8217;t miss the breakouts<\/strong> that may be just around the corner.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Carecom_CRCM\"><\/span>Care.com ($CRCM)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>$CRCM is an example of a stock that is <em>not<\/em>\u00a0too extended, having chopped around for seven weeks in a base that is currently testing support of the <span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span>\u00a0MA.<\/p>\n<p>Notice that volume has dried up within the base, while volatility has been contracting, both of which are bullish signs:.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"care.com stock chart\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160816CRCM.png\" alt=\"$CRCM WEEKLY \" width=\"660\" height=\"547\" \/><\/p>\n<p>Based on the chart above, $CRCM may provide a low-risk buy entry on a <strong>breakout above the descending trendline<\/strong> from the recent highs.<\/p>\n<p>A protective stop could be placed just below the low of the current base, which is below key support of the 10-week MA as well.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"RealPage_RP\"><\/span>RealPage ($RP)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Last month, $RP moved off its\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA and rallied to a new 52-week high on increasing volume (this is bullish).<\/p>\n<p>At the peak of that rally, $RP was trading roughly 20% above its\u00a0<span class=\"__postbox-detected-content __postbox-detected-date\">10-week<\/span> MA.<\/p>\n<p>However, the price has since settled into a consolidation pattern, with four consecutive weeks of tight closing prices on the weekly chart.<\/p>\n<p>This correction by time, rather than price, has allowed the 10-week MA to rise up closer to the current price of the stock.<\/p>\n<p>Take a look:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"RealPage stock chart\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160816RP22.png\" alt=\"$RP WEEKLY \" width=\"683\" height=\"618\" \/><\/p>\n<p>The price of $RP may not move any lower before breaking out to fresh highs again, but a touch of the 10-week MA would be possible if the $24.50 area (low of the base) is broken.<\/p>\n<p>Either way, $RP may present an <strong>ideal buy entry on a breakout<\/strong> above the high of the short-term downtrend line (not shown) that has started forming off the August high.<\/p>\n<p>As with $CRCM, a protective stop can be neatly placed below convergence of the low of the base and the 10-week MA support level.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With leading stocks ripping to new highs every day, you now have a clear and objective way for filtering out the stocks that could still be considered for buy entry, versus those that are too far gone.<\/p>\n<p>The weekly time frame\u00a0provides you with a bird&#8217;s-eye view of the overall trend, while the 10-week MA is an awesome gauge to speed up your nightly research and scanning.<\/p>\n<p>Be disciplined like a Jedi stock warrior and carefully\u00a0review my 4-question checklist above before buying any stock for a short to intermediate-term momentum trade.<\/p>\n<p>Both $CRCM and $RP have explosive potential in the coming weeks, so I humbly suggest you <strong><a href=\"https:\/\/www.MorpheusTrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">sign up<\/a><\/strong> for\u00a0my nightly swing trading report to be instantly alerted if\/when\u00a0either stock triggers for<\/p>\n<figure id=\"attachment_4617\" aria-describedby=\"caption-attachment-4617\" style=\"width: 180px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4617 size-full\" title=\"Wagner Daily newsletter image\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/08\/newsletter.png\" alt=\"Start your risk-free trial today\" width=\"180\" height=\"162\" \/><\/a><figcaption id=\"caption-attachment-4617\" class=\"wp-caption-text\">Start your risk-free trial today<\/figcaption><\/figure>\n<p>buy entry.<\/p>\n<p>Although this\u00a0article discusses nothing groundbreaking, my\u00a0simple approach works so well because it is easy to understand and implement.<\/p>\n<p>A proper buy entry should put you into a position of strength immediately after entering the trade, and that is what this trading strategy\u00a0is designed to do.<\/p>\n<p>Admittedly, the\u00a0charts above are pretty easy to read in hindsight; trading in real-time and with little experience can be challenging.<\/p>\n<p>Still, if you commit to always taking a step back to analyze\u00a0the &#8220;big picture&#8221; on the weekly charts, fantastic things will eventually start to happen on your way to ultimate trading success.<\/p>\n<p><em>Whether you enjoyed this article OR\u00a0thought it sucked, please share it and drop us a comment below. We love hearing from fellow traders!<\/em><\/p>\n<p>Cheers,<\/p>\n<p><a href=\"https:\/\/www.morpheustrading.com\/about-us\" target=\"_blank\" rel=\"noopener\">Deron<\/a><\/p>\n<div class=\"cfmonitor\"><center><script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\" type=\"text\/javascript\"><\/script><!-- Footer of content --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 300px; height: 250px;\" data-ad-client=\"ca-pub-7565144363001883\" data-ad-slot=\"7002222565\"><\/ins><script type=\"text\/javascript\">\/\/ <![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); \/\/ ]]><\/script><\/center><\/div>\n","protected":false},"excerpt":{"rendered":"<p>You&#8217;re not alone if you feel like you&#8217;re missing out on leading stocks rallying higher. Here&#8217;s a simple and low-risk way to buy the best stocks now.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-4608","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=4608"}],"version-history":[{"count":2,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4608\/revisions"}],"predecessor-version":[{"id":15202,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4608\/revisions\/15202"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=4608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=4608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=4608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}