Hey everyone, Robert Roy of WealthBuildersHQ.com. Welcome to this edition of Trade With Rob which is for July 14, 2021. Markets just closed up. Let’s go take a quick look at the market itself.
The S&P 500 is down today by about 15.5 points, so we had a little bit of a pullback. We had a really bit run in the last few days. A little bit of a pullback, stretched up to the all-time high again and pulled back from there, so overall, not too bad. We want to be very cautious on what we look for in a trade setup. Not all positions are moving in the direction of the S&P 500. It doesn’t have to be just a bullish trade; it just has to be a position that is working regardless of what the market condition is right now.
And for us, that position is Clorox, CLX, is what we’re going to be taking a look at today. You can see that Clorox, one of the darlings early on through COVID, really came crashing down, and they really have not done well at all. They popped their head up a couple of days ago. About a week ago or so, they had a run, and they’re back down below support level at this point, which is that 181.20.
So, here’s what I need to see happen for me to want to take this trade… I would like to see us come back up, close near the 181.20 level and fail. For you, you may look at this and say “all it needs to do is come near the 181.20 and roll over, and I’m taking the trade.” That could all be tomorrow. You’re not waiting, per se, for the closing price to be there.
And what I want to see happen if I take that trade off of that level, regardless of how you take it, if you take it off of the 181.20, your first target is at 175.50, target 1. If you’re wrong, your stop is up at 184, and you’ll be stopped out of all contracts. What does that mean? If you have one contract, you’ll close out one. If you have 10 contracts, you’ll close out all 10. The entire position gets stopped out at 184.
If you are right and the whole position moves down to 175.50, we’ll move our stop down to break-even, and then target 2 is going to be here at 168.50. You can come up a little bit to 169, that’s okay, but 168.50, 169, somewhere in that area is where I’m going to scale out of the balance of the trade, the second half of the trade.