We’re adding one additional candidate to the watch list, in anticipation of a breakout.
This candidate provides smart home and business solutions for the connected home or business in the United States, Canada, and internationally. It offers solutions that function as the operating system of the home, integrating audio, video, lighting, temperature, security, communications, and other devices in the home automation market.
New Watch List Candidate
Control4 has excellent IBD stats, as the stock rates a 99, outperforming 99% of the stocks in its industry group, computer software and electronics. It carries an accumulation rating of A+.
EPS percent change for the last quarter came in at 200%. In addition, with sales increasing 17% and a profit magin of 10.2%, this candidate has potential as the charts below indicate.
The daily chart is printing a bullish triangle, while volume suggests the current consolidation is nearing completion. RSI started to rise on Tuesday and SOTEMA is beginning to tilt higher. Price is above the 9/20ema. If MACD turns higher today, it will be a result of price action and will confirm the anticipated breakout. We’ll use the 5 minute TD setup for entry.
The blue highlighted area in the middle of the chart is the Opening Range (9:30 ~ 10:00AM). We will be looking for a similar scenario today, with or without a flag (A). If the stock begins its breakout of the triangle on the daily timeframe, it will likely show a brief flag as it rises today.
Price rose throughout the Tuesday session, with the lunch time lull producing a pullback contained at 50% Fibonacci. The hammer held this level, which led to a close less than 0.20 cents off the high of the day. Note the volume at the close.
If CTRL performs anywhere near as well as it did to start the week, we should see it rise early. If we are lucky, the stock will pullback less than that of the Tuesday lunch period (0.35) cents from the highs to the session.
As the SmartHome market continues to grow, CTRL will be perfectly positioned to excel.
Watch List Update
The watch performance for the week suggests we can add or start positions in any one of these candidates as they continue to rise. Use the 5 minute TD setup for new entries/stops.
Semiconductors held up pretty well on Tuesday, so we anticipate a continuation of this trend if the technology sector (XLK) remains strong again today. Together with strength in QQQ and NDX, we should get all the assistance needed for another follow through day.
Happy Wednesday,
Vinny