School is in session. Let’s look at New Oriental Education and Tech corp (EDU) (May 16, 2016)
I want to look at New Oriental ( NYSE:EDU ) here, EDU. This is a Chinese education company; you can see the stock has had a heck of a run. The reason I’m pointing to it today is because of this volatility squeeze. The difference between the upper and lower band is like 5 percent. The last time that happened you can see what happened with the stock. Boom! It seems like every time this thing has been squeezing, I wouldn’t really call this much of a squeeze here, but you get the point. If you just look at the Bollinger Bands, they expand and then they get narrow. Then they expand and then they get narrow. So now they’re narrow again and I’m looking for more of a move to the upside; this hit an all-time high today.
What I want to point out, though, in this video, is just real simple. Before you get too lathered up, too enthusiastic about this, take stock of where this is in relation to these key moving averages. It’s kind of extended above the 200, certainly not as extended above the 50, nice uptrends will do that for you. So maybe this is not just going to blast off if it does continue to move, and there’s certainly no guarantees. If you look at the weekly chart though, first of all it’s a choppy, choppy stock, but this has been in a really brutal downtrend/trading range here with resistance right around $35.00 for years. And so the fact that this stock is now trading above there, don’t discount the possibility that this could make a move all the way up to 50.00. Not tomorrow, not next week, but this is a stock that is definitely climbing, and if we just stretch this out a bit, and do this, there’s a channel. So it will take a while but if the uptrend continues I think you’ll see $50.00 here in the next few months, and that would work for me. As always, put a stop on the issue.
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