Hey, Ross here:
And it’s a brand-new trading week! Here’s a stock that’s every trader’s dream.
Chart of the Day
Trends don’t get much prettier than that of mid-cap insurance company Erie Indemnity (ERIE).
It is every stock trader’s dream – consistently making new highs with no major pullbacks. Its stock has bucked the bear market and marched to the beat of its own drum for the last 6 months.
The pattern I’m seeing is the stock consolidating for a couple weeks, forming a resistance level (see white lines on the chart) and then making a clean break higher.
So far, the stock is still searching for that sustained clean break past the latest resistance level – but I believe it’s only a matter of time.
If you buy this stock – or one that acts like it – hold on and enjoy the ride. I like to raise my stop behind the last swing low each time it breaks out into new highs. This way you can lock in profits as it goes.
Insight of the Day
When market visibility is low, look for a safety rope that can guide you forward.
Stocks fell on Friday after the Producer Price Index showed higher-than-expected wholesale prices. Once again, this triggered fears that the Fed would have no choice but to continue its punishing rate hikes, sending stocks downward. All eyes will now be on the Consumer Price Index data out tomorrow and the Fed’s rate hike decision on Wednesday.
Right now, the water’s muddy with low visibility. After Wednesday, things will be clearer – though not necessarily better.
Personally, when the market is this uncertain, I like to focus on trading strategies that rely on factors I know are highly likely to be there regardless of the environment. Sort of like the safety rope divers use when they venture into underwater caves.
And factors that are always there, no matter how the currents are moving? The fact that those with inside information on a stock will always take advantage of it to enrich themselves. I explain everything in this video here, but be warned – you may find it highly controversial.
Embrace the surge,
Editor, Stock Surge Daily