Wednesday morning

Gator's Chart of the Day: ATVI
(Click chart for a better view)

I've been in this trade since 4/23 (the last candle inside the oval) when the price crossed above the 50 day simple moving average.  You can see where the company reported earnings.  It's the last time the stock touched the bottom Bollinger Band.  Buyers kept volume above average as price fought its way back to a high above the upper BB but news hit that the company was not going to follow through with a planned buy back.  Still buyers kept coming for the stock and now it is once again closing above the Bollinger Bands and Monday the band's width was only 5.6% of the 20 day moving average.  That qualifies as a bona fide squeeze and Tuesday is the start of Phase 1 (the breakout.)

The Trade
It's not too late to start a position. (I am likely to add.)  The stochastic is not yet in overbought territory so we have room to run.  Phase 1 ends when the price stops going up.  Phase 2 is the pull back (taking some profits works here) to test the breakout and (assuming a successful test) Phase 3 is the move higher.  Buying back or just filling out the position if you have not already should be done here.  Ride as far as you can.  A good way to stay in the trade but not lose a bunch of profits is to use the previous days low as your stop on part or all of your position. That's the way I learned it from Dan and it's worked for me many times.