This week, the Market looks like it could move up barring additional bad news. All the major indices (SPX, QQQ, IWM) closed above their 5 period simple moving average lines and above previous resistance levels. While I don’t expect all ice cream and sunshine from here on out, I think there will be some sort of playable move this week.
This week, I’m planning to take my shot at Tronox Ltd (NYSE: TROX). I like this chart because it has had small down days with larger up days. It has been consistently closing above the 5-period moving average line. It looks like TROX got themselves in some sort of legal trouble at the beginning of December. The stock dropped abruptly but then consolidated and stayed fairly flat. I think this is a sign that bad news is baked in and pressure is there to drive back up to the previous levels. I also think that the price point should allow for me to get in and out for a profit, quickly before the market trend changes. I will be looking to buy below Friday’s high of $8.88 and will sell if it seems to be struggling to stay above the 5-period moving average line on the daily chart.
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