The chart of [[DENN]] is a great example of what you want to look for in finding a stock before an explosive move.
One of the most important things I look for before entering a trade is where the moving averages are located. In the case of DENN, they are all trading below price, this is something I want to see if I am thinking about buying– this provides great support for the trade.
Another thing I see in [[DENN]] is this nice flag pattern developing:
A breakout in the flag pattern would also spark a move above it’s 61.8% retracement level on a 9mo chart.
And, when you zoom out a little further to a 5 year chart, it also shows the stock stuck right below it’s 23.6% retracement level. So again, a breakout in the flag pattern would also cause a break in it’s long term fibonacci level
How will I play it? Simple, watch for a breakout in the flag pattern supported by volume. This is a recipe to find “BTFO” stocks.
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Earnings on Tuesday AMC.
Watchlist: APL, CAEI, CNO, CPSL, DVAX, ETGFC, GSI, HBAN, MS, NYX, OEH, ONB, PACR, PNC, ROSE, SIRI, SPRD, TESO, UIS, URRE, UTSI, WRES, ZION
Hi RC,
You said in your post that you watch for high volume and obviously the price action to confirm the breakout. What constiutes that type of volume to you? Just more than the average, or does it have to be outrageous volume like 2x the normal or something like that? Thanks for your insight if you have time.
-Ben
i want to see at least more than average.
top 3 picks right here: HBAN, URRE, & SD
Just realized earning for DENN are right around the corner, this may not work out like I originally thought.
RC – whats yr target on urre? zmoose is looking at 1.25. any thoughts?
love URRE here, it goes higher (I’m long)
no target, playing it by ear.
u think this is a decent IRA play?
Good game RC !
Hey RC, why do you like URRE? Isn’t the 50 day going to keep it down right above?
URRE will play catch up with the rest of the metals, it also broke out of a falling wedge pattern.