Here’s your setup on this stock with tight pants. Check out Philips Van Heusen (PVH) (May 31, 2018)PVH
Let’s look at Phillips-Van Heusen ( NYSE: PVH ) and this is why: This is a pretty good setup today. You can see the last couple of days, really big volume. The company reported earnings and they were obviously happy or I should say, it made investors happy.
I am looking at this stock, it is right at $160.00, which was kind of a ceiling here for a while. First of all, it hit here, got above it for a bit but not long enough to stay there. And then now we are back here at a higher low relative to this stuff here; we will get rid of these and start again.
This is what you really had here was this kind of a flat descending triangle pattern, a consolidation pattern here where stocks got really, really tight, right? So we had stocks getting really, really tight there and then you get a nice breakout. And then the tightening started again; this time this way. I took a small position today close to the 50-day moving average. I mentioned this in the forum today along with some other stocks that had similar looks and so I got a little head start on this.
Here is how I am going to trade it: If the stock starts trading higher, above 160.00 tomorrow, and volume is heavier than it typically is during the morning, then I am going to go ahead and start a position. And then once I get a bigger position on, I took just a very small position today. Once I get a little bigger position on then I am going to be putting a stop right down here so that my risk is very well defined, from wherever I buy the stock; that is my risk, right there. I found a good pattern here that works, in a stock with improving fundamentals. You can see the chart is just really, really awesome and I have got a defined risk.
This is a way that I can be making money on a pretty consistent basis. You are not going to get rich overnight, this isn’t a stock that is going to go up 30 percent tomorrow or buying out of the money call options, look at me, I made 1500 percent overnight. No, this is a type of trading tactic that you can apply over and over and over and over again and gradually you wind up building up your account kind of like just taking money out of an ATM machine and putting it in your pocket.
You can find stocks like this all the time if you know what to look for and then what to do. I have just explained it to you. A tight squeeze, pretty close to the 52-week high, a key level of resistance, it is breaking through, boom! That is when you make your trade with a well-defined risk.