Here’s a breakout that you can tweet about. Check out Carl Icahn’s stock (IEP) (August 21, 2014)
I want to give you an idea here on Carl “the tweet” Icahn ( NASDAQ:IEP ). This stock looks like it’s pushing higher. You could see the big squeeze here, I guess you could trade the stock, this is Herbalife, this, that, you know he’s kind of all over the map on things. But the stock has been trading sideways for a while; it’s been very boring, then it got real interesting and real exciting depending on whether you were long or short, but the liquidity isn’t that great.
The stock trades here on this day 89 thousand, 80 thousand, 125, today here, on Thursday, the stock traded a quarter of a million shares and that’s huge, that’s huge volume. So you’ve got to understand that if there’s a big buyer or a big seller on this stock it will move the stock in a big way. But with that said, I think you can take this thing for a little ride, because the stock’s breaking out, it’s on volume, and this is a good indication. There’s not a lot of aggressive selling right here, the stock had been bumping up against resistance here and then it’s starting to move up here.
I think you can buy “Carl” here, and I would just suggest using the 50-day moving average as a reference; just know that this stock could pull all the way back to the 50-day moving average. It could pull all the way back to here and there would be nothing wrong with this except that you happened to buy it at the zig, then the stock zags and you’re winding up selling it, and then it does this without you. I don’t know about you but that makes me really mad when that happens. It’s happened, and I’m sure it will happen again one time or another.
Just know that only if the stock falls into this box down here is this trade going to be in trouble. So you’ve got to trade lightly, you’ve got start small, give it some room, and then if the stock starts working in your favor then you add to your position; yes you are raising your cost basis, but at least you’re raising your cost basis on a winner.
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