Many of the early leading stocks are now extended past safe buy points. If the market continues to digest the past couple weeks gains, there may be some add on buy opportunities. VMW has provided an additional buy opportunity in the form of a Three Weeks Tight (3WT) base. The 3WT is when a stock closes on the week within 1% of the previous weeks closing price for three consecutive weeks. This is a sign that institutions are holding their shares and the stock is digestion before continuing it's price progression.
The buy point would be ten cents higher than the high price of the 3WT or $87.26. It also then will only be 6% past the original break out in early September. Volume ideally will be 50%+ higher on the breakout day.
VMW is in one of the top industry groups. It has pre-tax margins of 24%, quarterly EPS growth of 70%, quarterly sales growth of 48% and a ROE of 17%. VMW reports earnings again in mid October.
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