After dropping more than 20% at the close of the market on 8/29/19 things didn’t look so good for the cosmetic company. Their report wasn’t all bad as listed below, although the market didn’t like it and the stock fell 40% off of its highs. 

  • Adjusted earnings per share: $2.76, vs. $2.80 expected 
  • Revenue: $1.67 billion, vs. $1.68 billion expected 
  • Same-store sales: up 6.2% vs. 6.6% rise expected 

I didn’t pay much attention to this “overreaction” until almost a month later on Thursday September 26, 2019 when I noticed the stock moving sideways after finding support at the low of the recent downward move to $244.66 on 9/16/19. Usually that type of behavior in a stock leads to a breakout to the upside. I also noticed a $78.58 “gap” from 8/29/19 – 8/30/19. Gaps in markets have a tendency to fill. My trader senses at this point are on high alert for this potential rally in ULTA. The only thing I need is for the Zone methodology to set up which it did beautifully. I was able to purchase ULTA at $242.06 on 9/27/19. I am ultimately looking for this gap to fill and if not continue to trail my stop up passively until I get stopped out.

If you would like to get an absolutely free day pass to his or one of our other live signal trading rooms today, follow this link. >>http://bit.ly/nl-freepass

about the author:

Patrick Hammond

Patrick Hammond runs both our Momentum Stocks Room and Foundation room.

In our Momentum Stocks Room you will learn the “nuts and bolts” to trading stock. Get an introduction to stocks, learn about short selling, dividends, and see how they affect the price of the stock.

Our Foundation Room is a wealth of knowledge for all of our traders from beginning novices to seasoned vets. Here you can sharpen your trading acumen by taking things back to the basics or discover overlooked methods that can make you a more consistent trader.

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