HTO stock has retraced to crucial support levels indicating a possible uptrend resume for a 20% or more climb over the next weeks. Trading Greek stocks may sound dangerous nowadays but Hellenic Telecommunications Organization (OTE in Greek) shares could see a price rise gaining more than €1 per share, as the stock retraced to 61.8% Fibonacci retracement level, which has also been an important resistance and support level during the previous months. Using ATR indicator as a reference for setting a stop loss and scaling out the position in case the HTO stock does move up, would secure profits with minimum loss out of this Greek stock pick.
HTO stock was trading above €10 in 2009 but a 6 month decline pushed the stock price to almost €5. After hitting that low, the stock pulled back to €7.62 which has been a notable support level during the decline. The level is regarded as a resistance level now that the stock has broke above important resistance levels and seems to trending upwards after a 4-month consolidation period. Since printing that high, the stock price retraced during December down to €6.10 which is exactly the 61.8% Fibonacci Retracement level and also a crucial support level. If I was looking to buy a blue chip stock with tradable setup, HTO stock would just be the one.
Regarding the trading system, I would set a stop loss around €5.90 or somewhat lower due to the ATR indicator being about €0.20 and to proper equity management. Setting my loss to €0.20 or €0.30 per share while standing to win €0.50 or more per share seems acceptable to me, although we could aim to take profit higher. However I would scale out the position and trade out 50% of the shares around €6.87, since the stock met resistance twice in 2010 at that level. If the HTO stock’s price continued the uptrend I would sell 30% of my position at €7.60 and would leave 20% of the initial position in case the stock overcame the strong resistance level. I would then use Fibonacci retracements, support levels and Failed or Double Tops candlestick formations to exit the trade and perhaps make more profit with the remaining 20% than with the rest!
HTO stock might be proven a winner the next few weeks in the Greek stock market. Although it’s still a bit soon to talk about a bull market, we may have picked a good entry point for what is worth. [intlink id=”1218″ type=”post”]Read how this stock pick performed[/intlink]!