Well wasn’t that kind of a bust? Bulls came out of the gates roaring this morning. But things went south in a hurry during the last hour of trade. Ouch. While we did muster a positive close, it was well off the intraday highs.

And yet even though I’m not jazzed about this price action, I do see a few breakouts peaking through. So in my personal accounts I’m going to take a small bite of a stock here. I think it’s worth a shot because although this one hasn’t broken out yet, it is testing 52-week highs in this weak tape.

So long as you manage risk and the long-term uptrend remains intact (up-sloping 200-day moving average), I’m comfortable taking small positions in these strong names. In this case, Fortinet Inc (FTNT) came up on the top of my screens.

At this point in big-picture market price action, I think one of the hardest things is balancing the risk of missing out on a recovery to new highs and the resumption of the bull market… or… risk being over-exposed on the long side and suffering a serious drawdown. As the saying goes: risk cannot be eliminated, only transformed.

And that’s why my risk of the day is FTNT. It’s been a leader in the strong application software space. Let’s hope this pocket of momentum can get running again. Here are the specific trade details.

Buy FTNT (Personal Holdings):

  • Target Entry Price: $54.47
  • Stop loss: $50.11 ($4.36 below entry)
  • Risk: 0.3% of portfolio
  • Trading System: S1

So there we go! I like the way this one is consolidating near the highs and the ATR-based stop-loss is comfortably below the most recent consolidation.

As always, feel free to drop any questions in the comments. And you can always subscribe to trade alerts by leaving your email in the form below.