Weekend thread

A Christmas Card by Rune Askeland

Friday morning

FFIV Daily Chart

Jojo mentioned this stock more than once recently and y'all may remember I posted often about it in 4Q 2012 as I traded it following the Oct. earnings disappointment.  I haven't been in it at all in 2013. It has my attention again but for a different reason.  The 2012 trade was a bounce and gap fill opportunity but now the stock has consolidated and looks to me to be ready to move higher.  Thursday was the 1st green candle that closed above the  200, 150, 50 and 20 day moving averages since the Nov. 1st capitulation sell off.  The stochastic recently printed a buy signal. While volume is a little light any increase could give the price a nice kick start and breakout above the upper Bollinger Band.

The Trade
I think the entry can be made now as long as the price remains above 84.  The upside target would be a test of the Sept. high (94.66) and the initial stop would be just below the 200 day (currently 82.74.)  That would be a trade with 10 up or 2 down which is the same as 5:1 reward to risk.  I would start with 1/3 position and add the rest if the stock clears 86.  You may want to take some profits along the way using a strategy of moving a partial stop to a level just below the previous trading day's low.  Should a pullback present itself I would want to buy the bounce and place the stop just below the buy point.  Rinse and repeat 'til the target is reached and then use your stop to take you out of the trade.