MEMC Electronic Materials shares traded in the lows of the 52-week range last week, but found support for the third time at $4.50 and were up 3.90% on Friday, indicating possible bullish reaction this week. MEMC Electronic Materials stock (NYSE:WFR) has traded up to the all-time high of 96 dollars per share back in 2007 and lost more than 80% of their stock value during 2008! The 52-week range’s high is currently at $15, although I wouldn’t expect the stock to climb that far in the near future. On the other hand bouncing off at the support level on Friday along with MACD divergence might be the cause for trend reversal and possible gains in the days to come, that would put the WFR stock in the technology sector’s winners table.
There’s been quite of selling pressure recently regarding the WFR stock and trading against the trend isn’t exactly the recipe for success. However, catching up the trend’s reversal point and riding a bull market right from the start is surely the best trading system in the world! Let’s be real, could anyone remember when exactly was the last time they entered a bull market at the lowest point, let alone holding shares for months until the uptrend ended? That would be the ideal situation in stock trading and more particularly in position trading, but in this instance traders should be looking to make profit from swing trading. MACD divergence indeed implies that a reversal may be imminent. Support level certainly shows that investors are willing to buy WFR shares at the price level ($4.50). Yet MEMC Electronic Materials Inc. shares have been trading down to just one dollar in 2001 and there’s no guarantee prices won’t go south to that level again!
A reasonable profit target for WFR stock is trading out at $6.50. Waiting for a signal during intraday trading should be the best method to find a well defined entry point if traders are looking to trade long this NYSE stock. Of course stop loss, either mental or not, always helps to minimize losses in case buying power exhausts because of bad news or huge selling pressure. Buying WFR stock around $5.00 and risking no more than 70 cents per share while looking to secure profits at $6.50, equals to a reward-risk ratio better than 2-1. If you have been the lucky ones who bought WFR shares for $4.50 per share, we all are jealous of your reward-risk ratio!