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| Gator's Chart of the Day: NDAQ |
This one surfaced on one of the scans I ran after the close on Wednesday. I was surprised I've never looked at it before. The view above looks like a move from a volatility squeeze but it's been in progress for over a month and yet volume has been quite high all week. Wednesday was almost a bullish engulfing candle and the 3 minute chart showed heavy buying into the close. If you look at the daily chart for 9 months it gets scary parabolic and with the SP-500 within 30 points of my target this might seem to be too much risk to enter a trade now. I don't think so. The forward P/E is only 10 and this company can make money even with the general market tanking.
The Trade
While an entry around 29.50 - 30 might be more comfortable I doubt it comes back down. I think it may grind sideways but I would welcome a pullback and bounce for a better entry. I plan to start small and add if the stock continues higher. The initial stop would be a little under Tuesday's low of 29.93. Once in the trade I plan to hold as long as it continues higher so I'll likely use the preceding day's low dictate my stop.
