Computer storage firm EMC (EMC - Get Report) is having a good year, despite a selloff since the stock's highs in late March. Shares are up more than 12% year-to-date, besting the broad market by a factor of 2. Now, though, EMC could be in store for higher ground after a key reversal in shares. Here's why:
EMC made a bottom back at the start of June -- a low signaled by a bullish engulfing candle that broke the downtrend that had been driving shares lower since April. Since then, shares have been trading in an uptrend channel. While the channel in EMC is only in its early stages, it's been well defined by price action in shares (support and resistance each have been hit twice), and with EMC testing support this week, now's as good a time as any to be a buyer.
Momentum confirms the reversal in EMC right now, a nice added bit of evidence that EMC will continue to trade in the channel. If you decide to buy the bounce off of support here, risk management is key. I'd recommend placing a protective stop just below trend line support.As of the most recently reported quarter, EMC was one of Ken Fisher's top holdings. (For more on Fisher Investments' portfolio, check out " Buy Ken Fishe'rs 5 Favorite Stocks.")