Think your check might be in the mail? Check out Stamps.com (STMP) (October 31, 2016)
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Stamps.com ( NASDAQ:STMP ). Here is the deal: The company reports earnings on Thursday. If it wasn’t for earnings, if we were just looking at this chart with no thought to earnings to any other catalyst, this is the way I look at it: I would see this, kind of a symmetrical triangle, which is basically a volatility squeeze, in an uptrend You can draw all kinds of patterns here but they all amount the same thing. A nice move up here from 70.00 to almost $100.00 and then consolidation right below $100.00 I would look at this and say, “Hey, if this stock breaks out above $100.00 again I think it is going to go for a while, because of this number right here, 30 percent of the float is short.”
I am sure the stock is really expensive, but the company is growing in triple digits. The last three quarters the company was up over 100 percent from the same quarter the prior year, so this is a company that is growing. The stock chart actually looks pretty good. Here is the thing: They do report earnings on Thursday, so if the stock happens gap down forget everything I just said. Seriously, forget about everything I just said, that will be a whole different trade. But if the stock breaks out above $100.00, as long as it doesn’t gap up too much, if it breaks out above $100.00, I think you want to buy this stock because it could easily go up another 20 percent to 120.00 before we find this resistance.
So key in on Thursday when the company reports earnings. If you want to take a speculative position prior to earnings that is your business not mine. Seriously, I think only one time I have been pounding the table about taking a speculative position before earnings and that was on Big Lots ( NYSE:BIG ), with a huge short interest. That actually got me about a page in Jim Cramer’s book Getting Back to Even. This is not that. This is just a potential 20 point trade on a stock that may go through $100.00.
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