The Bulls are still in charge, and a number of stocks are reaching new highs.
And there’s something magical about brand-new highs or even 52-week highs: they sometimes run like crazy.
The reason?
There’s no “overhead supply”.
This means that the stock, when breaking to a new high, has never been there before. If it’s just a normal high at, say, $50, and the stock used to be at $60, then there are people sitting there holding our stock at $51, $52, $53, etc. And all of those people will want to sell and get out.
Thus, the overhead supply will mute our breakout.
But if price has never been this high before, there’s no one waiting to sell. And because of that, sometimes it just snowballs upward.
DKS (Dick’s Sporting Goods) fits that profile.
Here’s the chart:
DKS has made a few attempts at making a new high.
If it breaks above $152.61 this time, it could lead to a big move.
We’ll keep it on our radar.
Happy trading,
— Scott Welsh
P.S. As a reminder, these plays are based on my longer-term Weinstein Stage Analysis method. The chart above uses weekly candles and a 30 week simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.
