Looking for a low risk entry with strong possibilities? Check out this trade on Hilton Worldwide (HLT). (May 30, 2018)HLT
In this video we are looking at a stock, Hilton Worldwide ( NYSE: HLT ), it’s not a real super high-flyer but it is giving us an opportunity to start to build a position. The stock has been drifting sideways for a while; fell back down to $80.00 where it promptly found some buyers right at $80.00. It has now rebounded back above a sideways drifting 50-day moving average.
If you look at the weekly chart you can see this is a really strong stock, it has just been consolidating for a while. So this is a way that you can be buying this stock with a well-defined entry. You are buying it right here at 81.73. If the stock were to fall below $80.00 you don’t want to own the stock. Seriously, think about it. The only reason you are buying the stock right now is because you think this support is going to hold, we’ve got a nice zigzag here, higher high, higher low, higher low. You think the stock is going to do this.
If the stock starts falling like this don’t decide you want to look at the P/E and see whether it is expensive or not. Or hey, I wonder what their debt to equity (D/E) is like? No, you are buying the stock simply because it has hit a key support level and it is showing you that there are some buyers. So you are buying the stock here and you are keeping a stop just a little bit below $80.00; a very, very tightly controlled trade. And then you would add to the stock if it breaks above this level here.
So you are buying some now. You are waiting to be proven right and then you are adding to that position if the stock breaks above this last high. The idea is, that if it does this we are looking at $90.00, which doesn’t sound like that big a deal when you start the position at 81.73. But you know what? That is over 10 percent and in this kind of market, in this kind of sector, I will take a 10 percent upside target pretty easily.