Plains All American Pipeline
A similar setup is occurring in shares of Plains All American Pipeline (PAA - Get Report), a $10 billion oil and gas pipeline stock that currently pays out a 6.17% dividend yield. Plains broke out above a previous resistance level at $63 back in late October, and pushed through to new 52-week highs by the start of November, only to throw back to that newfound support level at $63 more recently. The ideal time to buy is on a bounce off that price.
Buying on the bounce is a crucial part of entering a throwback like either PAA or GLD. That's because support and resistance levels do eventually break; by waiting for a bounce, traders get added confirmation over the strength of that support level. They also see that shares have the investor demand required to spur more upside.It looks like shares of Plains are bouncing early in today's session. If you decide to take this trade, I'd suggest keeping a protective stop at the 50-day moving average. A reasonable near-term target is just shy of PAA's 52-week high at $66.80.
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