Is it really time to buy Mastercard?
This stock was the perfect bubble. Mastercard represents strong growth in foreign markets, an excitingly strong PEG ratio but is currently running the wrong business. Tight credit markets lower the amount of available credit and the amount that Mastercard users can afford to charge.
This August I took a look at Mastercard’s chart to see where this stock just might go. Mastercard in August After the stock started making the trend downward back in August, it eventually played out to reach a strong horizontal support. Today, I’m writing that Mastercard is a good buy, even amid a credit crunch.
Above was a chart in August when Mastercard had just began its downtrend. Now the downtrend has played out perfectly and pushed the stock to the next horizontal support just below $120 per share. RSI divergence is also showing itself, which leads me to believe that Mastercard is overdue for a bounce.
Also affecting my decision is the credit markets. Though in poor condition right now, I think after a Fed rate cut to 1% and the bailout money flowing to creditors, the credit markets won’t be getting any worse. If anything, liquidity is flying into the lending scene. More money to lend means Mastercard users can charge charge charge and make MA plenty of processing fees along the way.
Near $120 per share with RSI divergence and a strong horizontal support on its side, its time to pull the trigger on Mastercard stock. Here is a current chart:
