I mentioned in The Week Ahead video commentary to members that our best stock picks for the coming week would be Michael Kors and US Steel so lets do an update. What does it take to be rated a “Best Stock Pick”? It take a proper set up on a stock chart as in the case for both of these stocks. Each has broken out of a pennant formation retested and is poised to breakout to higher highs.
Even Best Stock Picks need Trailing Stop Loss Orders
The caveats I will mention about US Steel is that if the US Dollar rallies you can expect weakness across the commodity spectrum. As for Michael Kors although its fundamentals are astounding the Retail Sector is at near nose bleed overbought levels with little up volume to justify the move. Use caution and a trailing stop loss order.
Stock Chart Analysis
This is an abbreviated week so let's not make to much of Tuesday's action. I do not like the topping tail on the candlestick of Michael Kors because it implies that there are some sellers above. This observation is no reason to sell the stock but if we see this type of action continue the probability of a pull back and a break out point failure rises. As for US Steel it reversed off of earlier lows on Tuesday and flashed a bottoming tail on rising up volume which is very bullish. The point to watch is the $26.00 per share level which will market serious resistance. For now each remains on the Best Stock Pick list.