This volatility squeeze has further to run. (September 17, 2012)
SKH
I’m Dan Fitzpatrick at StockMarketMentor.com on Monday, September 17th. I’m starting with this because I’m going to end with it too. I’m going to be hitting you pretty hard over the next couple of days. We’re about ready to release; we’re actually in the process of rolling it out, OptionMarketMentor.com. Go over to the website and get a risk-less 30-day trial for the whopping amount of $7.77. Just go the website and sign up on the free email list. You can’t sign up for the service yet, we haven’t sent that email out, so just go do that. I promise you the most you have to loose is a couple of emails, one, to sign up when we let you, number two, to say, “Hey, I don’t like it very much; give me my $7.77 back.” Anyway let’s go right to work here, Skilled Healthcare ( $SKH Skilled Healthcare Group, Inc ). This is a stock that I think has further to go, they announced earnings, they weren’t that great, by the way it’s really thin, like 46,000 shares traded today, so don’t everybody buy it all at once, but you can buy it because I bought some, just don’t put in a market order, but you can get it. Anyway I think this has further to go, short interest in it is pretty high, so you think about it, their earnings weren’t that great and yet the stock still moved up. You know what’s controlling this? Volatility squeeze baby; this stock has been trading sideways for quite a while, now moving up to the upside off to the 50-day moving average and it’s very, very difficult to buy a stock that’s up so much in such a short period of time. Here’s the strategy though, just so you know, I’ve talked about this a lot so perhaps you already know this, what I’m talking about is a basic volatility squeeze, three part deal. First of all you’ve got the squeeze, then phase one is the initial move out which I believe we’re in right now; phase two will be when this move has run it’s course, you will get some kind of a pullback, I don’t think this little one day thing was it, but you will get some kind of a pullback where buyers should start coming in and ultimately propel the stock higher, So this is phase one here, this is phase two here, and this is phase three here. Right now I believe we are still in phase one so I’m happy to take this stock for a ride, just know ultimately this stock is going to rollover, don’t let it kill you, and if you don’t want to buy it now just watch it, wait, when it comes down, and it probably will, then you buy it and watch it move higher; you buy it on the first positive day after a pullback, I’m giving you pearls here. So anyway, you buy the first pullback here and then watch when this stock moves higher, but on the first pullback you wait for a positive close before you buy and then you buy more when the stock clears this level up here. So that’s how you trade volatility squeezes, that’s how you trade Skilled Healthcare ( $SKH Skilled Healthcare Group, Inc ). And I will tell you one more time go to OptionMarketMentor.com and sign up, risk-less 30-day trial, that’s going to happen, we’ll start it in a couple of days, but you need to get on the email list; $7.77 that’s not a misprint, for the first 30 days; we’ll give it back to you if you don’t like it. Okay, I’m Dan Fitzpatrick and I’ll see you right back here next time. Free Chart