Is Iridium Communications (IRDM) going to take off into orbit? Looks like it — so here’s your trade. (January 03, 2017)
RDM
I want to look at Iridium Communications ( NASDAQ:IRDM ). The stock went up just about 10 percent today. It had already been in an uptrend, but here is the deal: SpaceX, turns out they have found out the reason why their last rocket ship blew up, and that is always a bad deal, but it is nice when you find what the reason is. So here is the thing: They are set to launch 10 satellites for Iridium ( NASDAQ:IRDM ). They were supposed to be doing that before but they got all ‘blowed’ up. So now that this is back on track the stock has responded pretty well. But here is the thing that is really enticing to me: 30 percent of the float is short and I think that can be a problem for the shorts, because it is already in an uptrend. It was looking like a fairly attractive short, if you like to do this kind of stuff, but then today the shorts are taking it in the shorts now, lets put it that way.
So here is the trade: I think first of all if the stock falls below 9.75 or 9.50 you don’t want to be long the stock. Because this was really, really good news, the stock ramped up on volume, really, really strong volume, so this was good news. If the stock sells off and you get stopped out you don’t want to be long, because what you are learning is it doesn’t matter whether they put rocket ships in the air or not this stock is done going up. If that does NOT happen though you are good.
I think you can buy some stock here, lets frame this out, I would keep a 3 percent stop on it, really pretty tight stop on a partial position, about a 3 percent stop on it. Then you add to that position IF the stock breaks out above the December 20th high which is 11.15. So you are taking some stock now and then if the stock breaks out to a new high; about 29 out of 100 shares are really, really nervous when that happens and they are probably going to start buying. So this is a way you can get into this stock. It is already up big, you can get into it, participate with a small initial position, a 3 percent stop, and then as the stock runs up, again, if it does, you are up 6 percent on that initial position. Now you can add to it, now you are trading from a position of strength, you are profitable and you can ride this thing up along with those other 10 satellites.
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