Hercules Technology Growth Capital
And now for something completely different: Hercules Technology Growth Capital (HTGC) is a closed-end fund, but that doesn't mean that you shouldn't trade it like any other listed stock. Best of all, you don't have to be an expert technical analyst to figure out what's going on in HTGC right now. This setup is about as simple as it gets.
HTGC has been bouncing its way higher in an uptrend for months now. In fact, this fund's uptrend actually extends another six months beyond what the chart shows -- the trend it just that strong right now. Since the bear trap in April and May, though, shares have caught a bid off of support five times, and they're testing a sixth attempt. It makes sense to buy HTGC on the bounce off of support.
Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring the Hercules can actually still catch a bid along that line.To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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