GLUU looks like it is setting up for a mighty bounce.
Ok, we may have a catalyst giving this news here- Nevada legalizes first interstate online poker.
Take a look at the hourly GLUU chart below:
Did you see how the price action break out of the downward trend-line and then consolidated into a ledge? The way it is looking now, price action wants to go up. If it takes out the ledge high of $2.38, I will add more. If it takes out the low of the ledge at $2.27, I will cut my loss and move on.
I particularly like the big ass up bar right before the ledge. Sometimes, after a spike like this with higher than average volume; it may be a start of a runner if the catalyst is substantial enough; on the other hand, it could be one of those “spike and ledge sell pattern” within a bearish trend. This is why it is important to see which side of the ledge price action is going to take out next week.
Take a look at the daily GLUU chart below:
Did you see how it was bouncing… bounce once on mid-Nov 2012; bounce again on early Feb 2013; the 3rd bounce came off from a higher ground and stayed within the “upward” Andrew Fork lower line. In other words, I see a good risk/reward trade here as long as I use the ledge on the hourly chart as my guidance for protective stop.
Btw, I didn’t get into this trade until the last 15 minutes on Friday when I saw a spike up. This last minutes spike up reflected the price action upward bias inside the ledge; that was why I bought in my starter position. If it had spiked downward instead, I would have passed and skipped the trade.