WWE has been a long-term investment thesis discussed on this blog for just over a year now. When the stock became very extended this past July, we talked about trading around the position and taking some gains off the table.
Recently, the stock pulled back quite a bit and formed a “hammer” potential bottoming daily candlestick last Friday. With Tuesday’s high buy volume bounce, the makings for upside confirmation to the hammer are there. As long as Tuesday’s lows are not breached tomorrow, I think you can make the case for adding back a small piece to the core long-term position. However, I would keep some dry powder on hand just in case this low gives way.
Also, if you missed it earlier from Tuesday, please be sure to sign up here for a free iBankCoin account in order to comment.