Corey Rosenbloom: At the moment, three stocks have traded higher nine days in a row and may be ripe for a pullback.
Let’s highlight these three names from our simple scan and note potential opportunities from these lesser-known names.
We’ll start with Darden Restaurants (DRI):
All stocks will have the same logic but of course be sure to do additional analysis if you’re considering trading these candidates.
Each stock has closed nine consecutive days in a row higher in an impulsive move and logic suggests a pullback or stall is more likely than an extension well beyond 10 consecutive days in a row to the upside.
This is a mean reversion type of aggressive strategy.
The alternate method of trading these stocks would be to wait for the pullback/retracement (not trade short) and then buy shares as the pullback finds support. This strategy allows you to play into strength but on a pullback.
Darden (DRI) would be cautious/bearish under $51.50 or else “breakout bullish” above it.
Genuine Parts Company (GPC):
Similarly, GPC is uptrending in a stable trend from March to present.
Fortunately, we can see a similar instance of consecutive up-closes that took place in February 2014.
Note the spike in volume and consecutive closes higher from $75.00 to $85 per share.