Many of the $200 plus priced stocks have been high flyer momentum names over the past few years. Apple Inc (NASDAQ:AAPL), Netflix Inc (NASDAQ:NFLX), Chipotle Mexican Grill Inc (NYSE:CMG), Google Inc (NASDAQ:GOOGL), Priceline.com Incorporated (NASDAQ:PCLN) to name a few. It is interesting the volume that can trade in these names and their options (which can be priced higher than a lot of stocks) given the lofty cost of a round lot. But there are some high priced stocks that do not whip around like they are the subject of monopoly money players. That does not mean they cannot be interesting for a trade. WW Grainger Inc (NYSE:GWW), the distributor of maintenance, repair, and operating (MRO) supplies is one of them.
The chart shows it moved higher from a symmetrical triangle early this year and met the target move of about 262. Since then it has established a consolidation zone between 233 and 268. It is currently in the middle of that range, leading to the opportunity. A move over the current consolidation at 255 can be bought against a stop at 250 looking for a move to the top of the channel at 268. That is a better than 2.5:1 reward to risk ratio. But with the 50 day SMA rolling over there is a a possible pullback to the bottom at 233 as well. This is worth a trade if the stock gets under 247, using the 252 as a stop, for a 2.8:1 ratio. Use either the October 250 Calls or Puts, depending on which way it breaks, to limit your risk. It may not be a cool stock, but isn’t it about making money?
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