Today I want to look at Ulta ( NASDAQ:ULTA ), this is why: You can see this had a heck of a move on Friday. They blew away their earnings number, there’s basically nothing to dislike about it unless you were short. Lets just look at the chart. This stock has essentially been trading sideways since this breakout here. It’s been trading sideways for a LONG time. Honestly just look at the 50-day moving average here and the 200-day moving average here. They have kind of been converging to where (lets zoom in), if this thing hadn’t popped up here, give it another week or two, not even that, and you’ve got a 50-day moving average that’s going to cross DOWN over the 200-day moving average; that’s kind of a bearish development.
Now, here’s how you trade Ulta ( NASDAQ:ULTA ): You can’t go back and buy it here. You see the weekly chart, a complete round tripper here. But if this move is real, this gap, which starts, in other words, the top of the gap right where the stock opened, was right above this resistance level here. So if this move is REAL, and I think it is, you don’t put your stop down here, that’s kind of silly. You put your stop just a little bit below 185.00. The low was 184.10, so put your stop at 184.00. Make it fun and do 183.82, whatever the case may be. But just put your stop down there and what you’re going to have is, look at the box on the left-hand side of the screen here, you’ve got about 4 percent between where the stock closed here at 191.62 and where the LOW was. So you can put a stop, 5 percent maybe, 5 percent below where this stock is now, and that’s an acceptable risk for you to be taking.
Also, no matter HOW this gets up here the buy point here on this stock was on a new high, right here. Anything is possible, but I don’t see this thing reversing on Monday or Tuesday. We’ve seen these kind of moves lately, I’ll just say this, and this is a REALLY modest price target, this thing should go at least to 200.00. If it goes above 200.00, then it’s likely going to go a long way above 200.00. But right now I will just say this: You put your stop a little bit BELOW Friday’s intraday low, so it’s just barely inside the gap, and then ride this thing up.
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