"Reversing" may not be the best word to describe what's been going on in shares of Crown Castle International (CCI) -- shares of this wireless tower firm have been in rally mode for all of 2012, climbing more than 48% since the first trading session of the year. Since June, though, the rally in CCI has become more orderly, giving traders a chance at more predictable price action. So, how do you trade this name?
When I say that trading has become "orderly," I mean that Crown Castle 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 six months, and in particular, it's helped to identify the last four swing lows in shares. With CCI coming down to test trendline support this week, buyers have a chance to jump in when risk is low.
It's important to actually wait for the bounce off of trendline support before 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 CCI can still catch a bid at that trendline.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
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV