One Decision to the Next

 | Jun 20, 2014 | 9:00 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

ma

I think late April we discussed the bigger picture two-step pattern in MasterCard (MA). If the two-step pattern is going to play out fully, then the upside target for this pattern remains at the $89.12 area.

One of the things that you need to remember about the type of analysis that I do is that I like to take it from one decision to the next to help manage trades off these patterns. I remember posting a follow-up chart in this one where we were on top of a rather healthy resistance decision on the way up. That hurdle came in at the $77.84-79.27 area. Since this zone was not cleared when tested, I ditched my long position at that time.

 

MasterCard (MA) -- Daily
Source: Dynamic Trader

 

A natural but healthy pullback has unfolded since then. So, now the question is whether the rally that started with the April 11 low resume and take us to the original upside target or will we continue to fail from that hurdle instead?  I'm going to tell you that I don't know the answer to that question. What I do know is where price should hold above and re-trigger a buy entry if that is going to happen. We are getting close to the area that I would consider last-ditch support on this one. It comes in at the $73.15-73.74 area and includes key 100% projections of prior declines within the uptrend from the April lows.  So, this is the way I look at this. If price can test, or at least hold, above this key price support cluster, I am going to look for a buy trigger on a 15- or 30-minute chart.

My maximum risk on the trade will be defined at $71.50, which is just a bit below the low end of the price cluster zone. If the buy side is triggered, the ultimate target we are going to look for is the original target of the two-step pattern into the April lows, which comes in at $89.12. If the same key support is taken out instead, I will back off the buy side until further notice. I have been taking MA from one key Fibonacci decision to the next.

Columnist Conversations

3 insiders sold a total of 518,620 Starbucks (SBUX) shares for proceeds of $43.449 MM. 4 insiders dumped 558,1...
Yum Brands saw both insider buying and selling reported last week. One insider bought 10,000 shares for about ...
The bearish star cluster on the Starbucks (SBUX) chart that I highlighted last week preceded price action this...
Ford is working on its third straight gain following two days of steep loses to start this week. At this...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.