Unlikely as it may seem, we're seeing a technical trade pop up in
(BRK.B - Get Report)
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Berkshire has become increasingly popular as a trade for both technical and fundamental investors ever since the split in B shares brought prices down into the double digits. While the price difference between the two classes is huge, an arbitrage mechanism means that both classes look the same from a technical standpoint: They're both trending higher.
The uptrending channel in Berkshire is a buying opportunity, but it's one that requires a little bit of patience right now. Shares have done a good job of participating in the rally that started this summer, and now near channel resistance, they're starting to correct. As long as BRK's shares stay within the channel, the correction is just that, not a signal to sell. The best time to buy a stock that's in an uptrending channel comes at support -- it's the place where shares have the furthest to move back up to resistance (the top of the channel) and where they have the least distance to move through support.
Since a breakdown below support means that the channel is broken, it's a logical place to put a stop below. That means minimal risk. With Berkshire still around the channel's midpoint, opportunistic buyers would be well advised to wait a little while before jumping in.