Feeling Lucky? Try Luckin Coffee ($LK) for a Swing. (October 22, 2019)

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This is the Free Chart of the Day with Scott. I want to talk about Luckin Coffee ( NASDAQ: LK ). Luckin Coffee ( NASDAQ: LK ) has been kind of a chop fest lately but it looks like it is trying to move back to the upside. Today it popped up just above the daily 50-period simple moving average and did it on higher than average volume. A nice move here today for Luckin Coffee ( NASDAQ: LK ) and as you can see it not only popped up above a major moving average but it also kind of broke this downward sloping trendline here.

One thing will warn you about is, this stock on a short-term time frame, it can easily kind of shake you out. If I zoom in here on a 5-minute chart you can see you kind of need a little bit of a looser stop on this stock because it does kind of flush down and then run back up. I took a position in the stock kind of around this area here, as it broke above this level on volume. I kind of had a tight stop and it ended up flushing me out here only to make me buy back later at a higher level and there are few things as frustrating as that.

From a daily perspective I really like Luckin Coffee ( NASDAQ: LK ) and so I think we could possibly get a swing up to around $23.00 and that would be testing that level right here, which it tested the last time it broke down. So from just a logical standpoint if it is going to continue I think, at least that $23.00 level could act as an area of resistance. So there are two entries here, you could watch for a break of today’s intraday high on volume. Or potentially, watch for a test of the 50-day moving average.

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