Team, Inc. (TISI), an oil and gas servicing company, is looking ready to break out. It is a CANSLIM winner, meeting the criteria as determined by stock guru William O'Neil. I will look to go long TISI on a close above $40.55 on volume 25-50% higher than average.

Fundamentally, TISI is strong, as it meets the rigid CANSLIM criteria. It is also forming a decent Cup & Handle base that should lead to much higher prices as the overall market bottoms. Notice that, generally speaking, volume shrunk into the bottom of the cup. Volume then began to increase as price recovered, forming the right side of the cup. Price has made a slightly higher high, which is not ideal. However, most recently, the volume has dried up as the handle wedges downward.

The safest way to trade this is to wait for a follow-through day in the overall market (+1.7% on higher volume), followed by a close for TISI above $40.55 on much higher volume. My stop will be 7-10% lower, and my initial target will be $48-50.


Anonymous said...

Good luck with that. 3 of 4 stocks will follow the market and our market is still not trending up. I'd say stay on the sidelines until a confirmed rally is underway.

Narayana said...

Yes, luckily the long trade was never triggered as per my entry rules.