We found another momentum trade but readers will want to wait for a dip.
TSCO has been showing relative strength but we don't want to chase it.
NEW BULLISH Plays
Tractor Supply Co. - TSCO - close: 41.74 change: +0.13
Stop Loss: 39.40
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger
At September 25, 2010, Tractor Supply Company operated 976 stores in 44 states. The Company's stores are focused on supplying the lifestyle needs of recreational farmers and ranchers. The Company also serves the maintenance needs of those who enjoy the rural lifestyle, as well as tradesmen and small businesses. Stores are located in towns outlying major metropolitan markets and in rural communities. The Company offers the following comprehensive selection of merchandise: (1) equine, pet and small animal products, including items necessary for their health, care, growth and containment; (2) hardware and seasonal products, including lawn and garden power equipment; (3) truck, towing and tool products; (4) work/recreational clothing and footwear for the entire family; (5) maintenance products for agricultural and rural use; and (6) home decor, candy, snack food and toys. (source: company press release or website)
Why We Like It:
We are looking for strong stocks to buy on a pull back. TSCO definitely qualifies with the stock trading near all-time highs. The breakout over resistance at $40.00 a few days ago was another buy signal. We want to use a dip and launch bullish positions on a pull back to $40.50. If triggered our first target is $44.75. FYI: The Point & Figure chart is very bullish with a $61 target.
Buy-the-Dip Trigger @ $40.50
Suggested Position: Buy TSCO stock @ 40.50
Entry on November xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 751 thousand
Listed on November 11th, 2010