Chart of the Day: Closer Look at This Former Holding After Bullish Turn
This bullpen name is building a strong base that will eventually launch it higher.
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We are looking at Builders First BLDR again — the stock is in our bullpen but at one point we had it in our Portfolio.
The stock ran into some trouble earlier in the year but found a bottom, built a base, rose up and is building another nice, long base. The idea behind base-building is to show where there is good buying support on the chart. We can view this clearly over periods of time. Historically, the odds favor a bottom being put in after a few to several tests of lower levels have been made.
Given the low volatility in BLDR, for this stock to move up it requires several tests and even a slow move up, with higher highs and higher lows. We are not seeing that yet in the chart but as we can see the second base (square) is higher than the previous one.
We'll check the box on this one as being bullish. Further, the candles recently have been blue or green, and that is bullish. The chart shows BLDR is starting to encounter resistance at the 200-day moving average.
The indicators are mixed however, probably due to the lack of big movement. But make no mistake, since mid-June the stock is up more than 20%, not a bad showing for a retail name over two months time.
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We do not hold BLDR in TheStreet Pro portfolio but are looking at it closely for a place to add it.
