Want to see what a breakout from a volatility squeeze looks like? Check out Limelight Network (LLNW). (September 19, 2017)
I want to look at Limelight Networks ( NASDAQ:LLNW ) here. I don’t believe I have covered this stock perhaps ever. One of our more prominent members in the forum, Woodman, mentioned this today. I looked at this and thought, Wow! This guy is exactly right!
You can see how this stock has been in a volatility squeeze since the beginning of August, so it has been in a volatility squeeze for over a month. You can see MACD, moving average convergence divergence, starting to really act frisky. It is really showing the start of a move higher. And then finally, Boom! We get this kind of move today. It is a cheap stock so you can trade it like a millionaire, $3.80.
I look at this and this is how I would make this trade: Because it is volatility squeeze, it is a breakout from that and so the next entry point on this would actually be at a move above today’s high, which is 3.86. I would wait for the stock to break out to a new high. Then if it does so you know that there is some buying underneath this thing. We have had three decent sized days with respect to volume. So there is your trade on Limelight Networks ( NASDAQ:LLNW ). Nice kind of cup here. I wouldn’t really call this a cup and handle, I would call it a long volatility squeeze with a breakout today. Your first trade starts tomorrow on this, and then watch for the stock to trade up against $4.00. If it moves above there that is when you add to your position.