Anatomy of a Stalk Candidate — SODA – 9 September 2013 Close

SODA - 9 September 2013 Close

We have said many times that one of the best approaches for profitable directional (long/short) trading is to become a “stalker.”  Today’s chart is a great example of the type of chart one might stalk effectively.

We like a long entry (buy) right here with a very tight stop just below the horizontal line denoted by (1).

Alternatively, one could wait for a breakout through the descending trendline at (2) or a push up through resistance at (3).

If price falls through the rising trendline (4), all bets are off to the long side.