Low risk way to make a high risk play. Check out Juno Therapeutics (JUNO) (July 16, 2016)

by DAN JUNO 
In this Free video I want to look at Juno Therapeutics ( NASDAQ:JUNO ). What I am basically going to say is, this is a speculative buy. And here’s why: It is essentially a technical trade, but what you want to understand is, this is a huge headline risk. The stock DIVED because of some clinical trials that went awry, people died. Then it gaps up. Then it turns out that they misrepresented the number of patients that died. So it’s kind of a mess, lets just say it’s a fluid situation. But here’s the deal: You look at the way this stock traded lower on such huge volume, down the next day, and then a big gap up. This is one of the reasons why you don’t want to buy stocks that gap up 25 percent and are coming right back into prior congestion here. This is like a recipe for disaster; you want to short this stuff.

Here’s where the stock is now: The stock is at a higher RELATIVE low, meaning relative to the lower Bollinger Band. Here it’s well outside the Band for three different days in a row. Here, it’s well INSIDE the lower Bollinger Band for three different days in a row. So it’s higher relative to the lower Bollinger Band. Also, it’s higher relative to the price, the low. So we’ve got a higher low here. This is really the way you can trade this, again, it’s totally speculative here. I’m not pounding the table on this, I’m just showing you this potential trade. You don’t have to put a stop BELOW the initial low here. You don’t have to put a stop down there. Your whole reason for getting involved in this trade is because you think this gap up, and then a pullback, finding support here, you think this is a higher low and you’re anticipating the stock moving up. So why do you want to mess around with having a stop clear down here? There’s no reason. So you can take this stock, as a long, for a very small risk and maybe make 10 percent or so.

Free Chart