Here’s how you put your trading assistant on a stock. Check out Ra Pharma ($RARX) (February 11, 2019)
RARX
I don’t think I have ever looked at Ra Pharmaceuticals ( NASDAQ: RARX ) before, RARX, but I am looking at it now; here’s why: it is because of the way this stock is trading here. It is starting to tighten up; I wouldn’t bank on this thing popping out of a squeeze tomorrow. You can see how this is really kind of pinching volume. It is relatively low down here during this pullback and this is what we want to see.
I am going to zoom in just a minute but I just want to frame this thing. First of all, it popped out of a squeeze, nice move up, sideways consolidations for a couple months. Nice move up, a little move volatility here, you could even make a case for an inverse head and shoulder continuation pattern, which we actually saw that in the broader market, in the S&P a few years ago so we can make that case.
And then we get this breakout; it was on a little bit heavier than average volume right here. And then the stock has tightened up right in this general area. That’s kind of taking a walk down memory lane to see what the price action on this stock has been. It has gone from $6.00 clear up to above $20.00. You can say, “Well boy, that’s too late to buy this stock.” No; Amazon ( NASDAQ: AMZN ) was, at one point, at $6.00 and it up to $20.00. Wouldn’t it be nice to have bought the stock at $20.00?
I look at this and I am not scared off by the rally here, from $6.00 up to $22.00-$23.00. I don’t care about that. All I care about is the pattern. And so as I look at this stock the way I would actually trade this is, I’ll do it this way for my stuff, I will set this, going forward, and my alert will be if the stock breaks out above this line I just want to know about it, that’s it. If this stock breaks out above this line then it may be something that I want to buy if the volume picks up.
I am not going to look at this stock again until I get hit by that alert because I don’t care. I don’t need to be fixated and focused on this stock when it trades in a 50-cent range between $19.50 and $20.00 or even $20.50 or something. I don’t care about that, it is a waste of my time and it would be a waste of yours as well. So you set your alert and then you move on with it.
You can do stuff like, I will set another alert here, put a little note there, I just have like support, I’ll remember what it is. And then if your thing gets hit then you know what you were thinking because you have a little note there. And you are either buying the stock or you are watching it, or whatever. But you are basically saying to your trading assistant, otherwise known as your alert system, “Hey, I am grateful for your work. Thank you very much for paying attention to this stock; let me take a look.” Boom! You are either in or you are out but at least you are aware.
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