A Picture-Perfect Buy Setup

Yesterday, we took a look at the pullback in Xpel, Inc. (XPEL) and decided to wait for support before looking for a buy signal.

Today, we’re going to look at Shutterstock, Inc. (SSTK).

SSTK licenses online media in the form of pictures, illustrations, videos and music all over the world.

After forming a low-level base through most of the spring, SSTK broke out to the upside in late July and quickly slammed outside the upper Keltner Channel.

While this is a sign of an increase in momentum, it also signaled that SSTK was overbought.

Let’s see where SSTK stands now by taking a look at the daily chart below:

A perfect buyer setup

Profit taking came in and pulled SSTK back inside the Keltner Channel. Price is holding onto support from the midline of the channel.

This puts SSTK on immediate watch for a buy signal.

See ya tomorrow!

Trade Smart,

Michael Saul
Analyst, Chart of the Day

Michael Saul

Written By Michael Saul

Michael Saul has been trading the financial markets since the mid-1990s. He head first into studying price charts, devouring everything on technical analysis that he could get his hands on. Then, he moved on to trading stocks in 1999, and started trading options in 2000. The one thing he’s discovered through it all is you can never stop looking for new ways to gain an edge in the market.