Our trade on this high yielder is up nearly 5% today. Let’s map out the next move in this volatility squeeze in Consolidated Communications (CNSL). (June 12, 2018)
CNSL
I am looking again at Consolidated Communications ( NASDAQ: CNSL ). A lot of times I will kick out a stock on these Free Chart Videos and then I will want to do a follow-up on it; particularly if I think the trade is still working and I don’t want to leave you hanging. In that case this is one of those. I mentioned this yesterday. The big deal was the yield, which was like 12.8 yesterday. It is funny what happens to the yield when the price moves higher. But look, we are up almost 5 percent in a day so you can see the stock is under accumulation. I believe that this is why: Who wouldn’t want a 12 percent, a 13 percent yield, especially after a base like this? So this is pretty easy.
My suggestion is you stay long. This is in the first phase of our volatility squeeze. My setup, my style in trading these is, here is the initial squeeze. Then the first breakout, which started right here, the first breakout is what I call Phase 1. We don’t know how far it is going we just know that it is going. And then at some point it is going to stop and it is going to reverse. That is the end of Phase 1. Then we don’t know how far down this is going to go. Maybe it goes straight down to zero. Maybe it goes down just a day or two or whatever but maybe it falls to 12.50 and then at some point it finds support; there are some buyers.
Again, that support may be clear down here. In which case this breakout is a fakeout and you are not in. Or maybe you are in and you got stopped out but you just say, “Okay, the heck with it.” The point is, at some point this stock is going to turn around and then what we want to be doing is looking at this. How far down is it going to go? Hopefully, it won’t go down too far. Once it finds some support then we add to that position. Or if we didn’t buy initially, that is our opportunity to buy. And once the stock shows us that it has found support we buy it and we keep a stop right here. So if the stock falls we just take a small loss, that’s it. If the stock continues to move we are in a good position.
That is really where we are on this; we are still in Phase 1. This could move for a bit. It could keep moving higher or not. I would suggest, if you bought this stock it is up enough to where if you got this at the open after last night’s video or if you saw it first thing in the morning, then keep your stop below today’s low. Give yourself like 5 percent, maybe 4 percent room on this but give the stock some room to move because it will move around; that is just the nature of the market here. But stay long this stock and only be adding to your positions on the way up, okay?
Free Chart