Keep your eye on Mobileye (MBLY). Here’s your trade. (August 19, 2015)
MBLY
A tough day in the market today, specifically here for Mobileye ( NYSE:MBLY ), a really tough day. I think that this tough day for this stock is probably just an opportunity. The stock had been drifting sideways for a while. I’ve been bullish on this stock, but not from down here. I didn’t really catch on to this until later; I acknowledge that, my bad. I think the stock has more to go. It had drifted sideways here in this volatility squeeze, I’m pretty sure I covered it in one of these free videos but it might have just been on the premium site.
But here, look, we get a breakout, high volume, big move, right? Big move. This was on Monday, we get a little pullback, and then today a big move while the rest of the market’s down. This thing really got hit hard, big distribution, right? But it’s still holding above this 50-day moving average. There’s no real news that I’ve seen that would prompt this thing to come down. I think this is just, like I said, an opportunity. What I would suggest doing is watching the 50-day moving average as a reference here, right up there.
I think you’re best buying opportunity, hey, hope for a gap down tomorrow. If the stock comes down to about 58ish or so, note where it’s held before. If the stock comes down to about 58.00 I really think that’s where you want to be buying it. You can have a stop just a little bit below this level, though even then here’s the issue with stops. Back here, this is actually the low.
So what happens if you put a stop under the 50-day moving average, you get stopped out of a position at $56.00, the stock comes down a little bit above this level here and runs up without you?
I think one way you can do it is, again you buy as close to the 50 as you can and then just watch the stock, maybe just have a smaller position. Or have a stop on part of your position, which is something that I talk about a lot. You don’t have to be stopped out of the whole thing. You don’t have to go all in, pile in right at the beginning of a trade. No, you can scale in slowly. All I’m saying here is, after this kind of squeeze, after this kind of breakout, the fact that it’s pulling back, again, on volume, I get that, but it’s still holding above the 50-day moving average. I think this is the kind of pullback that later you will look back on and say, “You know what? I should have bought back there.”
Free Chart