I got the following question about ABB from Tim:
Interesting play going on with ABB. Just wanted to know where a good entry point would be; should I wait for a dip or what? Thanks
ABB appears to be on the verge of breaking out a very long flat base pattern. Here's the weekly chart which shows how long it's been basing:
Whether to wait for a dip or just dive in depends on your tolerance for risk. Many trend followers would just jump in as soon as it broke out. But others seem to think it's better to wait for a pullback. I honestly don't know which I'd do with this stock. I'm concerned about this being a false breakout so I'd probably wait for a close above 6.75 to decide how to enter. I'd probably want my stop loss order to be real close to the top of the trading range just in case the stock slips back into the range. So if the stock was close enough for me to have a reasonable stop on its first close above 6.75 I'd probably just jump in, otherwise I'd look for a dip to get in.
