With so many stocks breaking down, you might check out Immunic ($IMUX). (October 19, 2020)
SP-500 IMUX
On a day when nothing really seems to be working other than inverse ETFs ( INDEXSP: .INX ). One of the stocks that I am seeing that is actually showing some pretty good pin action is Immunic ( NASDAQ: IMUX ). What I am seeing here is a stock that is in a trading box. If we just kind of draw it here; this is the last high, the big high there, this is the low, right around the 50-day moving average, and the stock is essentially right in the middle of this box.
So why am I drawing this box? Simple, because I am looking at this stock and I want to buy it but I am not really getting the sense that this is the time to buy. It’s kind of a not right here right now moment because it’s pretty close to this resistance area here. So let’s say you are buying it here, you’ve got almost 6 percent of upside.
But if this would have to be your stop below the 50-day moving average, because the stock traded back down there a couple of days ago and has since rallied off of that. And so it would certainly be okay for the stock to pull back and test that, it might even test the 50-day moving average, right?
So if it does that and it is still normal price action, comes clear down here to test this, which would really offer you a really good entry, a stock back down below $18.00-17.80, 17.85, 17.90, that would be the real time to buy the stock, and keep that in mind, because I think it would.
But now you are looking at a stock, that if you buy it now you have to look at this early prior resistance here and say, okay, I’ve got less than 6 percent on the upside and I’ve got almost 9 percent on the downside. That’s not a trade that you want to make. This may very well be a stock that you want to own.
Look at it, it’s a nice little zigzaggy stock here, trading in a range here since it peaked. And since that time we are getting some higher lows right here. You are getting a move here and now a flat top. So I am looking for this kind of a breakout but I don’t really see that tomorrow is the day that, that could happen.
So my preference would be either wait for a pullback and then take a smaller position with a tight stop, a tighter stop than you could have if you are buying it here. You are buying it very close to the bottom of the range. Take a half of a position and then when and if the stock comes to break out that’s when you round out your position; you’ve got a cost basis that’s in the middle of the box but you haven’t had to take a lot of risk in order to get that cost basis.
That’s how I would trade the stock; I hope this helps you.
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