One of my first investing mentors was absolutely phenomenal at analyzing stock charts. He could see what was really going on beneath the surface, like a doctor looking at an X-ray. I picked his brain as much as I could — often using those little napkins at a bar after work — and I’ve relied on the charts ever since.
They’ve served me well, and one of my favorite set-ups continues to be a stock that is trading at strong support. It’s a great time to get in for the next move up, and a stock called MINDBODY Inc (NASDAQ:MB) is a textbook example of this right now.
Mindbody is the leading provider of cloud-based management software for the health and wellness industry. If you want to find the nearest yoga class, MB’s platform has it, with over 60,000 businesses in 130 countries available to anyone looking for wellness classes. It’s all right at your fingertips on your smartphone. It’s a great app.
MB is setting up beautifully for a buy signal right on its 50-day moving average (the orange line in the chart below). Over the last year, the stock has been in a fairly uniform uptrend, with a series of higher highs and higher lows on nearly a monthly basis. Since hitting an all-time high of $28.25 on March 21, MB has pulled back about 5% and is now sitting on that 50-day average. As you can see on the chart, the majority of the pullbacks over the last year have been right to that indicator. If you bought each time, you made money each time.
MB is right there again, having closed Tuesday about 1% above that key support level, and the next likely move is a run into the $30s. It’s possible it could trade below the 50-day for a short time, as technical analysis is not an exact science, but the risk-reward characteristics are very favorable.
For more analysis, you can click here for my video chart show on MB and the current opportunity. This is a great new company that I expect to follow for a long time, as it is part of the next generation of opportunities.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt is currently in the midst of an exciting launch centered around his trademark three-prong investing approach that targets the mega-trends old Wall Street is missing out on. His next-gen investing strategy is delivering enormous profits in stocks and ETFs. Click here for more information on his latest venture.
