Chasing stocks…

Hello Marty,

Figured will ask you a question here versus on X as I typically do.

I have been trying to get into $OKLO, $CCJ, $NVDA etc from the ready list these past two days. I set a limit price but they seem to get away and never revisit my limit price. My question is at what point is it "chasing stocks" which comes back to bit you real hard (based on past personal experience). How do you decide "overextended zones"? RSI? Other metrics? Or its just make hey while the sun shines? 🙂

This is a great question!

I use moving averages to determine if a stock is too  extended to be bought. I like to buy stocks closer to their moving averages and in this strong up trending market the 5ema is a good guide to buy strong stocks. If a stock is more than 3% above its 5ema then I would consider an entry to be "chasing" performance. I like to sit until they are closer to their 5ema.

In regards to the three stocks you mention, CCJ would be considered "chasing" as it closed on Friday 1.4% above its 5ema. It may be bought on Monday if it starts to bounce as it continues to find support t at its 5ema.

OKLO is not extended at all . In fact, it has pulled back to its 21ema and below  an old buy point of $59.14. It is forming a bull wedge pattern, and likely to bounce off its 21ema.

NVDA This is the most extended stock of the three you mentioned as it closed on Friday 3.1% above its 5ema. It has a standard buy point at $153.13 and I would consider it "chasing" to be buying at $157.75. Let it come back to your entry level.

Once again I like to use a stocks moving average as a guideline for entering stocks. We are seeing many strong stocks making new highs and then pulling back to their 5ema to find support and bounce. The relative strength list at the top of every report is filled with those types of stocks.

I hope this helps!

Regards,

Marty