some analysis of Riverbed (RVBD) — one of the few winners today. (October 23, 2012)
RVBD
I’m Dan Fitzpatrick at StockMarketMentor and OptionMarketMentor.com on Tuesday, the 23rd of October. The market really took it in the shorts today; probably the only people that were making money were the shorts. But one stock that bucked the trend is Riverbed ( $RVBD Riverbed Technology, Inc ) so let’s look at this. The first thing I saw when I looked at this chart was a volatility squeeze, what I mean by that is these Bollinger Bands are really pretty tight, pretty compressed; last time they were that tight was here and you see what happened, the stock pushed up to the upside, right? Okay, that’s all well and good, but this time around the stock pushed down and then we got a blowout to the upside. Why was this? Well because of earnings. The company announced earnings that at least the market liked and so what do we have now? We got a reversal of this downtrend or blowout to the downside, so right now the path of least resistance is up. You’ll notice that Riverbed ( $RVBD Riverbed Technology, Inc ) is up almost 4 percent on a day where basically everything else was nuts. The high, $24.00, we’ll call it, back here the high, we’ll call that about $24.00 too, so this is pushing right up against resistance. Here is how you trade this; any kind of a pull back into the $22’s is one that you want to buy. If you are buying with this stock breaking out, just know that you are making an aggressive buy. If the market trades higher tomorrow, it probably will, it seems like it’s really, you know, that’s just the way stocks go, they trade down a lot then the next day shorts covering, new guys come in to buy. If that happens tomorrow you are probably going to see Riverbed ( $RVBD Riverbed Technology, Inc ) trade up a little bit more, but just keep in mind that’s it’s gone from a close here of $20.45 up to $23.96. What is that? It’s $3.50 on a $20.00 stock, that’s a pretty significant move, a pretty significant upside move and let’s go ahead and do this; there it’s almost a 16 percent move in just a few days so it’s already taken a lot of buying pressure to push this stock up, I would be careful here, here’s how I would build a position; if the stock trades higher then go ahead and take some stock because you never know it might just run away, the market might be done going down it starts moving higher, it sucks Riverbed ( $RVBD Riverbed Technology, Inc ) right up along with it; but take a small position and then wait and see, and hopefully the market will pull back or I should say Riverbed ( $RVBD Riverbed Technology, Inc ) will pull back. Note the 50 and the 200-day crossing, that’s a pretty solid base of support, so if Riverbed ( $RVBD Riverbed Technology, Inc ) does pullback, closer to a key moving average, that’s when you add to your position; now if it continues to fall then don’t keep buying it on the way down all right? That’s a fool’s error and you want to just contain your losses, maybe lighten up, but I don’t look at that as a possibility right now; they announced good earnings, the market likes them, they’re up on a very nasty day; imagine what this stock would be doing if it was a good day in the market, so take a little bit now, look to take a little bit on a pull back if it occurs; I think you’re going to be on a nice north bound river. Okay members, get over to the Strategy Session, it’s ready to go. Free Chart