Long

MUSA (Long) - Find me a better base

By jurajholik

Fundamentals

And it is not just the base, the fundamentals are also robust. MUSA has immense amount of sales and even with the price rise we have seen, the P/S ratio is still staggeringly low at 0.4. The P/E ratio is also low at 13.
The reason behind the stellar share price performance is mainly the consistent growth in sales, regardless of market conditions, the stock has outperformed.
The reason why the stock is not even higher is two-fold: (i) very low profit margins, capturing only 2.6% of sale as profits and (ii) high debt with debt/equity ratio at 2.22
However, the firm has been defying expectations for a while in constantly beating estimates, hence the share price
And with that chart setup, it seems like continuing further

Technicals

Hard to say anything bad about this setup. I have been watching investors building this base, buying every dip and forming robust fundamentals for the past year.
The price clearly broke out of the base a couple days ago with volume and no resistance, ending the day at the highs.
This is one of my favourite setups and rarely fails (for demonstration, look at my past trades). I am not going to provide more evidence in terms of indicators and patterns, I have been watching the price action for 6 months, knowing the stock intimately, and this break looks very convincing.

Trade

The air is not completely clear until I see some continuation going ahead, but that could mean sacrificing returns, hence I went long on the break.
However, I have to caveat that if there is a sign of turning around and making this a fake breakout, immediately sell
A pullback to the entry point is allowed, but once we start breaking lower or lacking continuation, it is a sell signal
The trade is still good to enter here, but one can wait for a pullback to buy in. However, that would mean risking the trade gets away from you.

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jurajholik

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