Our Top Trading Setup This Week. A Freebie.
Our top trading setup featured to our customers this week was one of the best momentum setups we have seen in a long time.
The stock was Ambarella (ticker AMBA).
Now a good question to ask is “why was this such an incredible trading setup?” Why has it easily surged 15% within a few days after breaking out?
Well, there is a big reason why this was such an ideal setup and why we recommended it so highly in our newsletter. And its key to understanding how we can all make more money trading.
You may think that the reason is because it had very strong earnings and sales growth since going public about 2 years ago. While a great sign, this is not what made the setup on AMBA so attractive to us.
And its not because it recently had a blowout earnings report and a strong track record of beating earnings estimates.
And it wasn’t because the earnings conference call was so bullish. Raising estimates and mentioning new exciting markets that are not even factored into the estimates.
It wasn’t even the 2 bullish well-formed chart patterns and a strong uptrend leading into it.
This stock has accelerating earnings beats as well. Another very bullish factor that we have talked about in our webinars and blog. But that’s not the reason either.
No, the reason is that this stock had ALL these factors at the time it broke out. As a major market index was hitting new highs after a small correction.
And its in an industry where other top growth stocks are taking off.
When the market is breaking out of a consolidation or starting a new uptrend after a larger correction, a few top stocks are poised to lead the market higher.
Now AMBA is well past its breakout point and is due for a short-term pullback. But its already shown its a top contender for being one of the biggest winners this year and a leader in the next leg higher for the market.
Its also formed other very bullish patterns. Such as our classic swing trading setup when we featured it to customers in January and last fall.
When you can find a stock that has nearly every bullish factor that matters near a great technical entry point, you need to act. Of course not all will make a big move. But in our experience, they normally do when the market is trending higher or at least sideways.
There is no sure thing when it comes to trading, but setups like these are as close as we have found to it.
Look for a stock that has all these factors in place. Then wait for an ideal entry point in a positive market environment. And you will thank me later.
Our book that comes free with most subscriptions covers how to trade these stocks – a formula for when to buy and when to sell.
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