The top gainer on my watchlist today is building materials provider Masco (MAS). “The Fly” put out a bullish call on the name (along with anything housing related), and I thought I would dig a little deeper into this stock as it moves it’s way up the ranks (currently ranked #8).
Let’s take a look at the weekly chart:
Clearly, the stock is trading higher than at any point since September 2008. As you can see, there is a clear lack of historical volume between 20 and 26. Maybe this stock continues to run from here, but, as usual, I am looking for the stock to calmly digest this massive move.
Without a doubt MAS has certainly moved into the “buy zone”, but I have a very difficult time managing risk/reward when opening a position in a stock that is up over 13% for the day. I would much rather wait and let the dust settle and observe…waiting for a better opportunity to pounce.
See my arduous observation of RWT for nearly a month before I decided to buy some shares; hence my approach with this stock will be very similar. I believe there is room for a good 30% to the upside; therefore I am more than willing to wait for it to come to me before I get long.