Be wise, and take this trade on Wisdom Tree ($WT) – November 22, 2024
I’m going to go through WisdomTree ( NYSE: WT ) today.
I saw this in IBD, they had an article with an interesting title, “NVIDIA Gets Nicked, But This Cheap Stock May Be A Wise Pick”. IBD is a great newspaper, they’ve got really great trading ideas there.
I like the way this is shaping up. On the weekly chart, you can see this topped out for a while at $7.50.But since that breakout, it’s up 60 percent, over 60 percent. This is up at the top of the range, obviously, unless you’re blind you can see this pretty clearly. At $12.00 there is some resistance here but the trend is pretty clear.
It’s cleared this nasty v-bottom and is on its way back up, along with the rest of the market. Now, I’m going to the daily chart and you can see, I drew this vertical line, this is on the Wednesday after the election, just as a reference because we had a pretty big gap and run for the most part.
But in fact, if you look at this we see the gap up here and then it’s essentially, other than one day, it just continued to run. You can look at the S&P ( NYSEARCA: SPY ), this was the gap, it ran up for about 4 days, and then it had a big pullback. The same thing happened with the Dow Jones ( NYSEARCA: DIA ), it ran up for about 4 days and had a big pullback.
The test of support, prior breakout, current support, that was all good, it was really good. But then if we look at WisdomTree ( NYSE: WT ), what’s the difference that you see? The difference is, this really didn’t pull back much at all. It held for one day and then, boom, this thing shot up.
There was one retracement here, but even then, look, this was an intraday high and an intraday low. It just had a bad closing location, where the stock, ETF, whatever you want to call it, closed right at the low of the day. As opposed to most of these others right near the high of the day.
When I look at this I see a really, really strong chart. The stock is up here. It’s broken out above this last high. I think it’s I wouldn’t buy it right here but this is what I would do, I would track this 8-day exponential moving average. And I would use this as a reference for where I buy, this is almost a classic Scotty McGregor swing trade, tracking the 8-day moving average.
Sooner or later this thing’s going to hit it and, frankly, even if it hits it up here or up here, that’s still the better way to trade because you’re buying it at, the idea isn’t like where you buy it, it’s where the difference is between where you buy it and where you sell it, that’s really what matters.
Waiting for the best entry, waiting for a little pullback, or even just a drift sideways to the 8-day moving average, that’s really the best way to trade this stock. But essentially, here’s the deal. This is one that I think has the capability to continue to run higher.
So you can be a buyer of this stock, just make sure you have some kind of stop, and some kind of risk management in place so at any given time you are defining exactly what your maximum loss will be. If you can do that, you’re going to stay in the game a lot longer, and you’re going to make some real maximum gains.
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