There are so many stocks to analyze that I'm simply going to miss trade setups or come late to the party, sometimes. I just looked at Vipshop (VIPS) and it makes me sad that I'm late to the party on this one. That's the bad news. The good news is, we have not yet met an upside target for this stock, and buying a pullback will actually be a viable strategy.
First, let me explain what I like about this setup. I like that fact that the most recent decline of $5.99 is very similar to two of the other prior declines, of $6.00 and $5.90. I have illustrated these prior swings on the chart below.
Besides those projections providing the recent support, there was also a coincidence of a couple of other Fibonacci price relationships that came in around that same area. The support showed up at $18.45-$18.90. The actual low was made at $18.81 on Dec. 30. There were also a couple of timing cycles supporting that recent low.
Target one for this setup comes in at $26.43. Target two comes in at $28.50. Since the low was made, the rally has been straight up. What I need to see to feel comfortable to enter this trade would be a pullback to the $20.37-86 area at this point. I like to keep the edge by waiting for such a pullback. Let's say you are not as patient. Well, if you buy VIPS at current levels, you need to be willing to sit through a pullback, if you get one. Bottom line, as long as price holds above the Dec. 30 low, I think you will see higher prices in this stock. As usual, I will suggest that you ratchet up stops and/or take some profits when you get to the extensions of the prior swings. That means at $26.43 or higher.
One other stock I'm interested in on the buy side is Jazz Pharmaceuticals (JAZZ). I'm also a little late to this party, but it's not over just yet! I see that there was key support at the last low at the $154.75-$155.59 area.
If this last low remains intact, the upside potential is to the $191.67 area. My strategy is to look at an entry on a pullback to the last low.
The ballpark area I'm looking at comes in at the $157-$160 handles. I will consider myself wrong the trade if the Jan. 6 low is taken out.
