When an oversold stock stops going down, it just might be right to buy. Here’s a trade idea on Juniper (JNPR) (January 29, 2016)
I want to look a Juniper ( NYSE:JNPR ) here on this Free Chart, here’s why: The company reported earning on Thursday, maybe it was Wednesday night. I just know that Thursday this thing got absolutely crushed. I think they actually beat earnings but guided lower. I would rather miss earnings and guide higher, the market would too. But if you look at this stock, you can really see, on the weekly chart, this is big zigzagy” stuff here. And this pattern has definitely been broken. It was a nice uptrending channel that lasted for more than a year. The stock fell down, 22.00 is the floor right now. You look and see what happened on the daily chart, you see all the puking on Thursday. The stock gaps up on Friday and it closes, not above Thursdays INTRADAY high, but above the OPENING, above the opening.
That’s important because right now this is like the “oh crap” pattern here. Where all those folks who sold at the open on Thursday, certainly the rest of the day, are looking at this stock, going, “Oh crap! I think I might have sold at the bottom.” So you’re going to see buyers come back into this stock. I mean, guidance lower is guidance lower, and that’s the way it goes. But from a technical standpoint this is a really good reversal pattern. It’s still outside the lower Bollinger Band, which stocks generally aren’t supposed to be, not for very long or the Bollinger Band extends out to greet it. But here, I’m looking, 24.00 will get you to this intraday high here on Thursday. I would look for 4 or 5 percent out of this stock before it hits this prior support level here. So on a very short-term basis I think Juniper ( NYSE:JNPR ) is a trade for you.
But the real reason I wanted to look at this stock is simple. Because you see a stock that was in this pattern that I showed you on the weekly chart, then the pattern breaks down. You don’t have to just say, “Well screw that, forget about that stock, I’m done.” No! Look at it for other things. You can’t keep track of every stock in the trading universe. But you can keep track of quite a few of them. And when you see a pattern like this, when you see a stock that really sells off and then DOESN’T keep going down, that should tell you something. This is a great example: Amazon ( NASDAQ:AMZN ), this stock fell all the way to like 550.00. A little bit below 550.00 in mid-January. But then when they reported such crappy earnings the stock gaps way down but it didn’t hit a new low. So this is actually a good time to buy Amazon ( NASDAQ:AMZN ). I hadn’t planned on going into this right now, but heck I’m on a roll, why not?
So Amazon ( NASDAQ:AMZN ) is a really good buy right now, because it DIDN’T hit this last low. Juniper ( NYSE:JNPR ), different pattern but the same concept. This is the low, the stock gapped up on Friday and kept going. Basically, just as long as it keeps going up you want to be long. If it starts reversing and rolling down, then get out of the trade. No predictions here. But I’m telling you, this rubber band that has been stretched pretty tight, looks like it’s going to snap back a little more.
Free Chart