Meanwhile, specialty chemical manufacturer RPM International (RPM) has had a less volatile 2012. Shares of the Medina, Ohio-based firm have been making an orderly ascent for most of the year, but this week's pullback in shares provides an optimal entry opportunity for investors looking to buy shares.
When I say "orderly," I mean that RPM has been trading within a well-defined trend channel. That channel has helped to identify the likely price action in this stock for most of 2012, and in particular, it's helped to identify the last five swing lows in shares. With RPM coming down to test trend line support, buyers have a chance to jump in when risk is low.It's important to wait for the bounce off of trend line support before actually buying this stock. Clearly, 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. Waiting for a bounce ensures that RPM can still catch a bid at that trend line. Since a breakdown below support means that the channel is broken, support is also a logical place to put a stop below to ensure minimal risk.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV