Crown Castle International
It's been a stellar year for shareholders of Crown Castle International (CCI - Get Report) -- shares of the $20 billion wireless infrastructure firm have rallied close to 50% since the first trading day of January. But hindsight is 20/20. With a massive rally under foot, the question now is whether CCI will be able to keep up its trajectory from this point on. Here's how we'll know...
Right now, CCI is consolidating sideways in a rectangle pattern with resistance at $68 and support at $64. That's not a surprising turn of events -- consolidations give shareholders a chance to catch their breath and decide what to do next after a large move, and CCI shareholders probably need to breathe after the rally. The easiest way to think about a rectangle is that it's an "If/Then Trade": If shares of CCI breaks above resistance, then it's time to buy shares. If they slide below support, then it's time to short. There's no trade until one of those conditions is met.
I realize that this strategy of selling a "bargain" and buying a more expensive stock may sound alien to a diehard value investor. But as a technical trader, it doesn't matter if a stock becomes more expensive as long as it keeps getting more expensive until you decide to sell. Waiting for the breakout gives us a high probability that it will.