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Grill Company Traeger's Chart Shows a Possible Turn

Real Money's Tim Cook has spotted a key pattern in the newly public company's trading.
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Stock charts are beginning to show some potentially positive trends for a newly public grill company.

Real Money's Tim Cook recently took a look at action in Traeger  (COOK) , which came public at the end of July at $18 a share and finished its first day of trading at $22.  It  traded as high as $32.59 shortly after going public before starting a weeks long decline. 

"The stock does show potential support around $22.50. This comes with the asterisk of being the first few days of volume from the initial public offering," Cook wrote recently on Real Money. He added that there isn't "much in the way of moving averages, or even secondary indicators to focus upon."

One pattern that did draw his eye last week was the formation of possible doji candlestick on Traeger's daily chart. 

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In a doji on a candlestick chart, the stock’s opening and closing price are identical or all-but identical. While intra-day trading may be extremely volatile, giving the stock extremes on the high and low end, ultimately traders come back to right where they started.

"The doji is often a point of exhaustion. It doesn't guarantee a turn, but it is a day when both buyers and sellers get rejected while making a push," Cook noted. "With the stock doing nothing but heading lower over the past month, a doji on the heels of negative news is often a bullish sign."

For Cook Traeger has become more attractive. "This is one I want to own long-term, so a longer-dated option that is in-the-money makes sense. The strategy here for me will be to roll this as well get into November and push it out a few more months."

Get more trading strategies and investing insights from the contributors on Real Money.