Thanks for the great research. I read you every day!
I am writing for some advice. I am not sure what to do about Visa. You always say that trees "don't grow to the sky" but I bought Visa at the IPO and at the moment, it looks like the sky is the limit! I know that at some point, I need to cash in on my profit but you also often say to not "shoot a running horse". So when do I know that my "tree" has stopped growing and that it is time to get off the "horse"?
Good to hear that you are getting value from the analysis. I have only examined the case for Visa Inc. once and that was almost three years ago on May 19, 2010. Scott wanted to know if the stock was a good buy after an aggressive two week decline from $95.00. The shares were trading at $70.09 and it was advised that it would best to patient and wait to confirm that support at $70.00 would hold. After trading in a range with support at $70.00 and resistance at $80.00 the stock began a steady advance that began in March of 2011 and has endured for just over two years. Sweet!
You have been on this ride since the IPO which priced at $44.00 in 2008 so you are sitting a substantial profit. You might want to consider getting your adjusted cost basis at zero and taking your original investment out. By taking your original investment out you can diversify your holdings and make other decisions on how to best meet your life outcomes.
Another run at the charts will help you decide if you should stay or go and how much to take with you in either case.
The three-year chart is a text book example of an elegant advance with many outstanding features. The stock has tested support along the uptrend line and the 50-day moving average without a serious breach. It has built a ledge of support at $160 that will have to be monitored. The move from $160 to $170 had some investors taking some profits off the table. The MACD and RSI both signalled that some selling from the high was developing as we came into April of 2013.
The six-month chart provides a closer look at the support at $160.00 and the sell signals generated by the RSI and the MACD in late March early April. The next corporate event for Visa is the release of second-quarter 2013 results in May. The Street is expecting a 12.7 per cent increase in earnings from the prior year which represents a substantial jump from prior quarters.
At this point the stock is pulling back after a jump to a 52-week high. The MACD and RSI are suggesting that there is more selling to come so watch support at $160.00 like a mother bear watches its cubs.
Make it a profitable day and happy capitalism!
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