Monday Morning



Gator's Chart of the Day: FIO

I've got a heavy weight on my line ... I'm going bottom fishing.  Clearly the stock is in a bearish configuration with the 20, 50 and 200 day simple moving averages all above price.  I posted last week that I was waiting for a green candle and that happened Thursday.  If we had not been going into such a newsy weekend I would have started my position Friday.  Daily volume was not impressive but it did pick up in the last 20 minutes and the stock closed with good momentum.  (A five minute chart gives a good picture of this.)

The Trade
It looks like the market is going to open higher Monday and I'll be looking for an early entry.  If the stock gaps up I won't chase but instead I'll look to buy an intraday pullback and bounce.  If the stock does not open higher I probably won't take the trade at all.  I don't think the 20 day will provide much resistance and I'm looking for the upper Bollinger band as a near term target.  I think the stock can challenge the 50 day before it needs much of a rest.  If I can get my entry I'll add if/when it clears the 20 day and I'll likely have a full position with that first add.  My stop will be very tight.  I'll be using Friday's open (18.70) for my stop on the initial buy and for adds the stop will be similarly close.