Here’s a trading idea for a pre-earnings runup. Check DECK. (October 14, 2014)
I want to look at Deckers ( NYSE:DECK ) here, because this stock has bounced off of the 200-day moving average. It hasn’t done that in a while, but it’s pulled back from the highs here, from top to bottom, like 17 percent, something like that, almost 17 percent. They’ve been outperforming, they’ve been doing really well. I’m looking at the trend it has been sideways for quite a while, this is just essentially like a high base here.
So what I’m suggesting is this, they announce earnings next Thursday; I think they’re going to run up a bit into earnings. The nice thing is, you don’t have to risk that much to take this trade. You put a stop below yesterdays low, that’s 83.17, you can see that on the left side of the screen; you put a stop below yesterday’s low, let’s say 83.00, put a stop down here.
You can go ahead and take this trade, looking for some upside here, and then if the stock does continue to move up, hey it’s all good; if it doesn’t you’ve lost a little bit of money for your efforts, which in this case I think it would be a pretty good risk reward. Again, it shows evidence today, when everything else was pretty weak into the close, Deckers ( NYSE:DECK ) is strong, up almost 2 percent, so I think this trade is going to work.
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