It has been a while since I posted one of my plans for the week ahead and I've missed the process, this week I would like to share my Compass Group ( CPG
) set up which I think is a great long. Compass posted strong half year earnings
on the 15th of May which was well received by the market sending the stock up to an area that has played a role as resistance in the past, 1820. The price tested this area in April of this year and was unable to break through since then we have seen the stock go through some weakness to bounce back to then level on the strong earnings
report. Last week's candle saw the formation of a doji
where the market is making it's mind up about the 1820 where we will either fall away or break through and see new all time highs which is always a good time to trade a stock as it will be on a lot of peoples watch lists. The moving averages I use mainly 200/50 SMA
and 7 EMA
are all leaning upwards supporting the idea that the stock is in an uptrend and buyers should have control.
The plan for this one is to, set a stop order at 1821 as we haven't seen a full break yet so the level still holds good meaning we can get a tight entry to it without there being too much overhead resistance. I have my stop loss set at 1789 which clears most of the lows from last week easily giving the stock enough room should it fail to break out at the open but still tight enough to get a 1% account loss set which is vital for risk management. My target for this set up is a 5/1 RR giving me 1986 however, I will trim the potion by at third at the whole numbers of 1850 and 1900 making the psychological burden of holding a bit easier. I hope you have enjoyed this analysis and if there is anything you see differently feel free to comment. Thank you!