A Good Time to Go Long

One thing that investors must do is to avoid chasing stocks. Although at times it can be successful since we know stocks are known to make runaway breakouts. However, if you do chase
stocks, you can often find yourself holding through large downturns as stock fluctuates and often make a poor decision to sell near the support level. The ideal situation is to buy as close to a stop level as possible or as close to a support level.

The six month chart for Dreamworks Animation (DWA) is currently showing a scenario where it is trading near the support level. For several months, $41 range has been an critical area for DWA as it was the resistance of a consolidation range. DWA cleared this resistance last month and is trying to test this level as support. If DWA holds this level and trades higher, then it would be a good investment prospect.

Investment Strategy:
Go Long on DWA at or below $42 with a STOP order below $41 to limit any risk in the downside

American Axle & Manufacturing Holdings (AXL) is another stock we should consider going Long. It has been trading between $8.50 and $10.50 and recently, it broke its resistance level. After retracing back to $10.50, it is starting to take off higher.