One of the first things you learn when you become a trader is that stocks that break above 90 per share usually go to 100, a ten percent how-you-doing that you get just for sticking around.
I call it the “Never Sell at 90 Rule”.
Anyway, my favorite stock in the whole market is and has been Visa and it’s about to test that rule. By way of full disclosure, I’ve been buying $V for four years now, I own it everywhere from the high 80’s to the low 70’s. The only thing that ever really knocks it down is when there’s a scare about caps on the fees they charge merchants. But then everyone adjusts and realizes that Visa and Mastercard ($MA) are in secular growth trends no matter what – the migration from paper to plastic is unstoppable, even as mobile payments begin to take share the need for processing keeps $V and $MA right in the middle of it all (probably why Buffett’s been loading up on Mastercard, he loves moats this is a huge one).
Anyway, the last time Visa broke above 90 it didn’t work, but that was then and this is now. Visa’s ready to test that rule again and I think this time – crazy market event notwithstanding – she’s gonna do it…