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Logitech: A Chart View

Logitech's charts look great, but an investor should wait for an entry in which risk management works.
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By L.A. Little of, author of Trade Like the Little Guy.

It becomes harder and harder each day to find something to buy in this market. The thing to do now is to evaluate all the potential charts and determine which look best so when the next opportunity to buy comes around you can quickly pounce on it.

Here's one for your list --

Logitech International


. It has an angle on Google TV and there are signs that accumulation is happening in the stock.

Here's the daily chart to show what I mean.

You can clearly see signs of strength coming into the stock as defined by the large thrusts higher on price and volume. Those anchor bars provide support for any kind of pullback in this stock and it is where you should look to enter if this market stops running higher for a few days. If it doesn't, and if Logitech runs even higher, then the higher support zone will need to be used.

On the weekly chart, you can see that resistance is just overhead.

Volume continues to be quite good though and there is no guarantee that edge of resistance will rebuff this advance. It could easily carry right to the top of the resistance zone. That leaves you with a choice -- you can either chase it higher or be patient and wait for a better setup. I'd go with the latter position. It is a stock to purchase once the opportunity presents itself, but you can't chase it or you will end up in a losing position.

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I say it is a stock you want to buy on any kind of a pullback because if you look at the monthly chart you can see a kind of cup and handle formation.

If Logitech can trade over the swing point high from October of the past year, then it should easily be able to run to the next resistance zone on the long-term chart in the $23 to $25 price zone.

Logitech displays great charts. It beckons buyers, but you need to be patient and wait for an entry in which risk management works. Although I already have an existing position, I too am waiting with the intention of building my position further on any pullbacks.

Until next time, just keep trading the charts!

At the time of publication, Little was long Logitech, though positions can change at any time.

L.A. Little, author, professional trader and money manager, writes daily on

, a free educational site for traders and investors. He has been featured in numerous publications and is the author of

Trade Like The Little Guy


His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.