Lining Up Reasons To Buy

It's generally nice to see multiple reasons to buy a stock.

If a stock is testing its 50-day SMA, then those who like buying on 50-day tests will be interested. If a stock has consistently bounced off of a key level of price support, then those interested in buying price support tests will be interested. If a previously-rising stock stalls temporarily and the RSI dips back into the 40s, those awaiting pullbacks will likely be interested as well. But what if a stock is doing all of those things simultaneously? Enter Flex Ltd. (FLEX):

Enter Flex Ltd. (FLEX):

FLEX is currently trading in a range from roughly 23.00-25.00. Since breaking out above 23.00 in January, we've seen FLEX trade up near 25 and back down close to 23 on 4 separate occasions. It's been a great trading vehicle. Note that the RSI has held 40 support 6 times out of 7 opportunities. And for the first time since strengthening in October, FLEX is testing its 50-day SMA. Throw in the fact that FLEX is a leading stock in the strong electrical components & equipment industry ($DJUSEC). We always want to make sure we're able to keep our stops tight. When FLEX nears 23.00, we have price support, the 50-day EMA, and a favorable RSI all in our favor for a long trade. It doesn't guarantee us a winner, but it does guarantee a smart trade.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.