Here’s your trade analysis on MasterCard ($MA) – August 30, 2023
This is Dan with Fitz in Five. I want to talk about Mastercard ( NYSE: MA ) today.
We bought Mastercard ( NYSE: MA ) a couple of days ago and I said, “I think we are a little bit late”. Typically you want to be buying these things because of a pullback. You see it’s moving higher, it’s off support, let’s get this stock now, let’s start a position on it now.
But I really felt like I could do it without doing that, simply because I saw what was happening here. The stock had just really broken through 400.00. Look at the duration of the base here, of the high base, it was almost 3 years, so this is a really, really solid base. And then you also see Visa ( NYSE: V ), which has given us kind of a similar thing.
What I am saying is, it was time. So I look at that and I see that the stock ( NYSE: MA ) is starting to break out above this down-trending line. Volume is kind of a bad average, there wasn’t really much volume at all. Nothing remarkable, just the same old, same old. But it just seemed to me like this was a big technical break right here.
This last high, way back here and here. It’s too far back to really be relevant, other than just to pattern watchers like me, who will see this and remark on it. I really felt like the downside was to $400.00, though I kept the stop right below the 50-day moving average. And so, okay fine, I felt like, in one respect, I was late. But in other respects I was early, so I’m going with the early part, frankly, right now.
So what do we do? Well, the stock is just absolutely going great gangbusters here. It is trading completely above the upper Bollinger Band, which is supposed to contain, I think, like 91 percent. I forget what the stats are but it’s high, 91 percent of all price action. So we are seeing here 4 consecutive closes outside the middle Bollinger Band, and that is after this initial breakout right here.
This is what strong stocks do and it is not a sell signal, it’s a buy signal. It tells you, hey, something is going on here, and people are buying the stock, maybe higher than they should but they are doing it for a reason. And so this is what is really happening with Mastercard ( NYSE: MA ) right now, this is exactly what is happening with it.
So on a short-term, on a swing basis, it is time to really start hiking your stops up. If you got, hopefully, a better entry than I did here. If you are really, really focused on your profits, then go ahead and do that. I just don’t see that there is really that much profit to be taking at all. I would just stay the course and focus on this weekly chart.
The idea is, that this is a typical Phase 1 move of a Phase 3 volatility squeeze sequence that I have always looked at. Where the Phase 1 move is here, and then what we really want to do is know how far the pullback goes. In my view, if it holds 400.00, that’s a good outcome. It could fall below our entry point, but I don’t care about that.
What I care about is, what happens next. And so, I think on this one, you have got to have staying power. You want to have a little starting power for this kind of trade. And then ultimately, you will be able to stick with this trend. They just announced that they are going to raise their credit processing fees, which kind of screws people like me, but that is okay, I am still pretty blest.
Visa ( NYSE: V ), and Mastercard ( NYSE: MA ) are both raising their processing fees. That is going to go right to their bottom line and that is why I think this stock, ultimately, I think it has a 450.00 handle on it, and my bet is, before the end of the year.