We Spotted CDNA Before the Breakout. Here’s What Happened Next. 👀
We originally found CDNA using MTS Velocity because it had many of the characteristics we look for: big earnings and sales growth, strong margins, strong relative strength, and a leading stock in a leading group.
The price and volume action gave us more reasons to pay attention:
• Higher highs and higher lows.
• Powerful advances on heavy volume.
• Several pullbacks and sideways pauses with tight price action and volume drying up below average.
• Renewed buying as price pushed higher.
After its last earnings surge, CDNA spent time consolidating in a relatively tight range before continuing its advance. The rising 20-day moving average has been a useful guide throughout much of that trend.
This is what we spend our time studying inside MTS: finding strong candidates, preparing before the breakout, and watching how they behave afterward.
It’s also a reminder that finding a winner is only part of the job. You have to give it room to work.
A stock being up from your purchase price is not, by itself, a reason to sell. Follow the price and volume action, respect your sell rules, and avoid cutting a healthy trend short simply because you have a profit.
Cut your losers short. Let your winners run.
