Tuesday Morning

Gator's Chart of the Day: BWA

Borg Warner Inc reported earnings on July 26th before the market opened.  (7/26 is just left of the green arrow.)  The report was nothing special as they missed by a penny on the bottom and cut guidance.  It didn't seem to matter as the stock went up anyway.  After battling with the 50 day simple moving average the stock pulled back a little and made a higher low.  Now it has moved above the 50 day (or the 50 day has moved under the price) and it looks ready to work higher if the market will cooperate.

The Trade
I am not looking for the market to move higher in the next couple of days but that doesn't mean BWA can't.  I believe a position can be started here if you take a small bite ... maybe a 1/4th position with a stop below the 50 day (around 65.20.)  If you have the patience you may consider a lower stop ... but I would not set it much below 62.50 as that was the higher low. 

I'm looking for a test of the 200 day as a minimum target and 77 looks reasonable.  With that in mind I would add on a move above 69 and would want a full position if/when it breaks 70.