Here’s how you trade an extended stock that’s also coming out of a volatility squeeze. Check out AnaptysBio (ANAB). (November 16, 2017)
ANAB
I want to look at AnaptysBio ( NASDAQ:ANAB ) today and here is why: I am not sure if I covered it in the Chart of the Day or not but we were looking at it as members. The stock broke out here on pretty good volume. If you just look at it this way you can see it was substantially above average. This was really a buying opportunity, though you had to respect this high. We see what the stock has done. It is okay, you don’t expect these to just completely blast off but here it is just a little bit higher than it was at the outset here.
So, is this still an okay time to buy? Should you add? Should you sell? What do we do? I am looking here at the 5-minute chart and you can see that this is yesterday’s chart on the 15th. That was a big breakout here and now we are coming back to it. Let’s just see how the action played out. We are up high, high, high; 75.00, 76.00, 76.50, 77.50. Wow! 78.50, pretty nice. Now we are into 11:30 and the stock is drifting sideways, almost up to a new high, not quite, we were higher here. The high was 78.68 right up around here. So this was a new high. The stock continues to drift. Now we are past the noon hour we are into 1:00; all the buying pressure was in the morning. The trading activity is dried up. Now we are into the 2:00 hour, a little buying spurt there, a little selling spurt there. Now we are selling off into the close and that’s that.
So why did I walk you through that? Because I want to look and see what the trading action was during the day. I like this move, I like the way this stock trades. But it is a little bit concerning that the stock closed off of the high by quite a bit, quite a bit. The stock was up to almost 79.00, right? And so it closed down 5 percent from that level. That tells me that there is not really a lot of buying pressure that is going to immediately push this stock higher.
I think this is one you want to watch. This would not be for a quick trade. This would be to be owning a stock that had this breakaway gap that is holding this move. You had a big breakaway gap up here and then it is holding that level and starting to move higher. So we are actually going to want to look at as, how high did this stock go? It went from 35.00 up to 70.00, that is about a double. Then we are going to look for substantial gains going forward if this stock can get out of its own way.
I would want to see this stock move back above, we will say 79.00. I am going to set a personal alert, and I will do that this way, 79.00. So I will get alerted to this stock if it breaks out above of there. By the way, if it doesn’t maybe I will buy some down here so maybe I will set an alert here around this level too, I will know what it is for. So now I have the stock bracketed. If it pulls back I will get an alert and then I will consider whether I want to buy this stock on this little pullback. If it looks like maybe I am getting a head start on what I think will ultimately be a move. On the other hand, if it breaks out to a new high then maybe I do that and I see the upward momentum and I will get it that way.
Anyway, that is kind of the long and the short of AnaptysBio ( NASDAQ:ANAB ). I hope this works for you.
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