The exact same setup is forming in Visa (V - Get Report) right now, but the payment network is closer to being buyable from here. Like BHP, Visa has been rallying hard in an uptrending channel since June, climbing more than 28% since the first trading day of that month. Now, as Visa comes down to test support for a ninth time, it makes sense to buy the bounce.
The fact that Visa has made so many bounces off of support already is a good sign. It proves that this stock can easily catch a bid at or below that trendline support level and that the rally hasn't just been a fluke. That doesn't change the fact that it's critical to wait for shares to actually bounce off of that support level before jumping onboard -- we still need to see that buyers in Visa are active before it makes sense to put real cash on this trade.
The 50-day moving average has acted as a good proxy for support over the last several months. That makes it a logical spot to place a stop below...