This past week, Zillow Group Inc (NASDAQ:Z) warned on their upcoming earnings. The stock was halted before this news was released and upon re-opening, it dropped sharply. However, institutional buyers quickly stepped in and bought. The stock reversed to close flat. The following days saw consolidation. Due to the high volume reversal and following consolidation, this stock has a high chance of moving up. The key is looking for the right pattern to form. Should it pull back slightly and continue to consolidate, this could be a great trade setup for a buy. Looking for $90 or below. (This trade and the others below will be alerted to members live, exactly at the time when the position is entered. Stock positions will be alerted in the Research Center here, and options positions will be posted here.)
United States Steel Corporation (NYSE:X) broke out early last week. As the market weekend sharply later in the week, it pulled back. This is exactly what a trader is looking for. This is called a retrace into the scene of the crime (into the breakout level). Traders love this setup as it is high reward, low risk. What is even better? The stock has the 50MA and 20MA right at that level as well. This gives it more support and ultimately makes it safer. Look for a pull back into the $24.75 level or slightly lower.
Freeport-McMoRan Inc (NYSE:FCX) broke out last week with on high volume. It has now started to consolidate in the upper range of the breakout candle. Look for continued consolidation over the next few days as a slow retrace to the $19.50 level. Just like U.S. Steel, it has extra added support of the daily 20MA and 50MA. The buy range starts around the $19.50 area. This is a classic setup should it continue to form.
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Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
