Riding the CSL highs

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

ASX
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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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.