5 Facebook Sympathy Trades From the Tech Sector
Seagate Technology
Last up on our list of tech sector sympathy trades is hard drive manufacturer Seagate Technology (STX). Shares of Seagate have been locked in a steep uptrend since all the way back in October. The critical component of that uptrend is the trend line support line -- it identifies the dynamic pocket of demand that's trailing shares as they climb higher.
Put simply, each of the last four times STX has tested support at the trendline, it's caught a bid and moved higher; with shares testing that level today, investors could have a low-risk opportunity to buy.
A second support level at the 50-day moving average makes the setup even stronger.
Buying at support is low-risk because you know quickly whether you're right or wrong on the trade. After all, a breakdown below that trend line is an exit signal, so the closer you are to it, the smaller the capital at risk. There's one critical component to buying any stock at support: waiting for the bounce. Ultimately, trend lines break. By waiting for a bounce off of trend line support, you know that STX can still catch a bid at that level before putting your money on the line. Don't buy until that happens. Seagate is one of the top holdings at David Einhorn's Greenlight Capital as of the most recently reported period. To see this week's trades in action, check out the High Volume Technicals portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.Follow Stockpickr on Twitter and become a fan on Facebook.
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