The markets continue to be in a very volatile and bearish mode.
If the market breaks below last week’s lows it could begin a major correction.
Therefore, we want to continue to keep our stops tight and the number of trades to a minimum.
Check out today’s trade. This has been setting up for ALL YEAR.
Below you’ll see the weekly chart of Activision (ATVI). As you can see it has been basing all year.
The base alone doesn’t make it a good trade right now.
The reason to focus on ATVI now is because two weeks ago, right as the market began to roll over, it announced earnings.
The earnings news pushed ATVI out of its base, but the market downturn pulled it back into the base.
Now with market still in a bearish mode, ATVI has held up well in the support of its base.
The next time it moves up we want to be there.
It will be much better if the market is also headed high too, so let’s be patient and wait for it to start move.
If ATVI trades over 50, then it should breakout and run, so that’s the buy trigger.
Once entered, control your risk with a stop under 47.
This could be a big one, but be patient and wait for the buy trigger.
Rick Nartarian, Chief Investment Officer
Darwin Wealth Creation