Before I get started, let me say that even though VMW looks good here for a long, I do think it came a little too quick too fast. As such I would l am looking for a little pullback to somewhere around $84-$85, where I will consider buying some for a bucket 2 trade.
In today's Morning Line-Up newsletter I highlighted this name and would have been ready to buy at $84, but that opportunity never arose today as the stock has been a rocket all day long.
Back in early March I highlighted a nice head and shoulders pattern that our subscribers took advantage of and ended up scaling out, although the pattern did not reach its full and final price target. See the first chart below. We have left the stock do it's thing since then.
Now however VMW is ready for longs as it built a solid bottoming pattern and blew through both the 200 and 50 day moving averages (red and blue lines). See the second chart below. As mentioned earlier, I would not chase the stock here but rather wait for an opportunity to get in around $84-$85.
The big question? Does one risk buying VMW ahead of its earnings announcement, currently scheduled for April 19…also known as next Tuesday. For me personally it's a no. Once earnings have come and gone I will reevaluate the stock and as such am happy to watch VMW act well now…even if only from the sidelines.
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