[Premium] Trade Of The Week

Here's Cipla Ltd., attempting a breakout to new all-time highs after a couple of months consolidating below our initial price target of 830. If prices do manage to close above 830, that would confirm a breakout and get us long with a target near 1,100.

Click on chart to enlarge view.

After a strong run at the index level over the last 2-3 weeks, some consolidation would be healthy. As such, rather than buying stocks that are already pulling back, we'd rather be looking for stocks showing relative strength and have yet to confirm a breakout (unless those lagging stocks offer a very skewed reward/risk, like Punjab National Bank).

Once that breakout occurs, we can get long and minimize our risk...and if the breakout never confirms, then we never enter and the stock is someone else's problem!

Make sure to check out our other weekly post, "Three Charts For The Week Ahead." And if you missed Friday's post on the Energy sector, check it out here.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team