Waiting to Pull the Trigger on 2 Big Names

I find that many newbies always enter the market at the wrong time. It's typically when they are excited about a stock in the news and they have what is called FOMO, or Fear of Missing Out. Sometimes this tendency to jump in will work, but more often than not you will find a better entry in the stock if you have some patience. You need patience to wait for a pullback. To set up my pullbacks I use Fibonacci ratios and what I like to call symmetry. Symmetry is similarity or equality when comparing two market swings in the same direction. I see two stocks that currently are pulling back that interest me here. They are Altria Group Inc. and Toll Brothers Inc. . Let's start with MO. Altria Group (MO) View Chart » View in New Window » Altria has a new pattern of higher highs and lows since the May 15 low was made. It may not have all the key moving averages on the right side here, but both the pattern and the symmetry of this current pullback tell me this is a good time to stalk an entry in this name. There are two areas of support that stand out in this case. The first zone is being tested at the $58.25-55 area, and so far price is holding above here. The second zone comes in at the $57.52-90 area. What I typically use to tell me it's worth entering the market is called a trigger. This is essentially price action that suggests the zone may hold (see my trading plan here). So far I don't see a swing trade trigger firing off for entry, but I will stalk it this week. My risk will be defined below the Fibonacci price cluster zone that I use to place the bet against. The minimum target I'll shoot for if one of these zones holds up is the $62.07 area. If those same areas of support are violated instead, then this trade setup is a bust for me. Let's look at Toll Brothers next. Toll Brothers (TOL) View Chart » View in New Window » After a rather long bearish pattern of lower lows and highs, TOL finally has made a decided move above a prior swing high that was made on Aug. 9. This is what I consider a shift in pattern. When I see such a shift, I don't want to buy the breakout, but I want to look at this on a pullback after the breakout. This is what we are starting to see here. Now this pattern won't always play out, but it does often enough to want to watch it. What makes it a bit safer is waiting once again for that pullback but then also waiting for the trigger to suggest that the zone may hold and provide at least another swing up in price. The area I like for possible entry comes in around the $35.89-36.59 area. This includes the .618 retracement back to the recent low made on Aug. 15 and a 100% projection of the prior decline of $3.21 into the Aug. 15 low. Also, the prior swing high that we took out was $36.68, as illustrated on the chart. When we pull back to where the breakout was from, that also will tend to be an area of support on a pullback. We are very close to this area of support here, so it's time to watch the 15- or 30-minute charts for a buy trigger. I don't see one yet on the 15- or 30-minute chart. (Please read my trading plan, which will explain exactly how to find these triggers.) My risk on this one typically will be either below the low made prior to the buy signal firing off or below the low end of the support, which is $35.89. Some traders who want to give it a bit more room also may place a stop loss under the Aug. 15 low. Bottom line, I don't have buy entries in these just yet, but I will be stalking them this week and will wait for my triggers. If I don't get those triggers, I'll stand aside in these names.

Waiting to Pull the Trigger on 2 Big Names

I'm stalking more favorable entry points for Altria Group and Toll Brothers; here's the plan.

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