BMI – Simple Stalk Candidate – 3 January 2014 Close

Simple Trading Stalk Candidate


Badger Meter, Inc. (BMI) looks like a classic opportunity here.  In October/November, the stock broke out to the upside and then pulled back to establish a support level at 1.  Price bounced off the 50ish level and proceeded to exceed the high made in late November before pulling back once again and establishing a rising trendline by reversing at the $52 level at 2.  Price once again resumed its upward march.  It exceeded the previous high around $55 and proceeded north up through $56.  Once again, price pulled back to the trendline at 3 before reversing back to the upside.

We think BMI is worth stalking for a long entry.  An entry anywhere below Friday’s $54.52 high as long as it’s above Thursday’s $52.70 low looks compelling.  A stop just below the rising trendline and/or Thursday’s low looks reasonable.  Remember, stop placement is an intensely personal consideration… It has to take into account your trading personality as well as your risk tolerance.  We mention where we would put a stop for illustrative purposes only.

A fall through $50 would nullify our posture with respect to BMI and cause us to remove it from the long Stalk List.