With three days of sideways action on the S&P 500, I am turning my attention towards stocks that have either bull-flagged its price action or pulled back to a key support level, following a massive move higher.
I found the latter RR Donnelley & Sons (RRD) with a stiff pullback to the break out level that it had soared through just a little over a week ago. Now it is testing support at the $17.50-80 level, while holding the 10-day moving average.
If this bounce holds, I think there is a strong chance that RRD will blow past the $20 price level.
There is support under $17.50 if that support level doesn’t hold, at the $16.80 level. If that cannot hold, then get out and get out FAST!.
Managing risk is key to successful trading and when it cannot hold key price levels, you have no reason to stay in the trade. I’ve laid out the parameters, now it is your opportunity to play it, should you choose.
