CSL Limited trade idea

The healthcare company has been one of the best performers on the ASX 200 for a while, consistently testing 52-week highs over the past few months.

Source: Bloomberg

CSL continues to deliver strong revenue growth, with solid demand for its products. Both plasma products and immunoglobulin are experiencing significant growth and the company continues to look for M&A growth opportunities. Additionally, it is well leveraged to a recovering US economy.

It seems every time the stock consolidates, it’s not long before a breakout comes to fruition. Between August and October, the stock was range bound within the $72-$75 region. Eventually, at the end of October it had enough conviction to knock through that barrier, taking the stock up to the $80 mark.

This level has since presented some challenges for CSL, resulting in a month-long consolidation between $78-$80. A darvis breakout formation now seems to be in play and this is could take CSL another leg higher. The key will be for CSL to close above $80.44 today, which is the October high. This would effectively be a darvis breakout. Traders could potentially buy the stock above $80.44, with stops placed in the $77.50 region. Given this is unchartered territory for the stock, targets will have to be assessed on the momentum of the trade.

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