I’m All About The Base
- Posted by Frank Zorrilla
- on February 3rd, 2015
I’m always intrigued by huge bases, because normally a prolong period of contraction leads to a prolong period of expansion. $COH has been basing for 8 months after a couple of earnings blow ups last year. The base just tells you that the sellers have dried up and whole new set of stock holders (buyers) are taking control. What you normally see at the end of the base right before the stock takes off is a series of higher lows. That is exactly what is happening with Coach, we now have a series of higher lows, the stock is now above the top of its 8 month base, and trading above its 200 day moving average, something that it has not done since January of 2014. A close below its 50 day moving average will negate this constructive (as I see it) pattern.
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Frank Zorrilla is the founder and chief investment officer of Zor Capital LLC.He began his Wall Street career 10 days after his 20th birthday when he became a Series 7 licensed stock broker. More »
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