Riding the CSL highs

Last week I suggested buying CSL Limited (CSL) in a bid to take advantage of the strong price momentum.

Source: Bloomberg

The stock has continued to trade at fresh 52-week highs and has now nudged through the $85 mark. CSL is racing towards $86 after trading at a high of $85.91 today. This has seen the price up 6.8% from the entry level and while it is tempting to take profits now, I would suggest riding the trend until it is exhausted. Although the stock is quite overbought with an RSI of 77.84, momentum indicators are still quite bullish. I feel trailing stops from $77.50 to $82.50 is the best way to proceed, as it leaves a bit of room for the stock to move. I will continue to monitor the stock’s progress and will update it in due course.

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