Here’s another look at Align Tech ($ALGN) (July 22, 2021)
ALGN
I am going back to the well here with Align ( NASDAQ: ALGN ). This makes it easier to floss, easier to date, and people actually don’t mind riding in the elevator with you irrespective of whether you are wearing the mask, right?
I talked about this a couple of days ago on the 20th when it had pulled back here. It pulled right back to the 50-day moving average and was kind of working on this, 1, 2, 3 top base with a rising support line here. So this is kind of the epitome, not perfect but it’s the epitome of a volatility squeeze looking for a breakout. And on something like this the first entry, if you can get it, the first entry would be right there on the first move higher, so you would be buying somewhere in here, this is when I featured it.
Now, let’s go back here. This would also be a good entry for the same reasons. I didn’t state that at the time because I didn’t see it at the time. But now I am looking back at it and I just want to point out, this would also be a good entry, but it’s a low-risk entry because you know what has to happen in order for you to be wrong. And that is that the stock has to kind of break out of this range, so you are giving up or you are risking 4 or 5 percent.
So if you bought here, yay, oh my gosh, I am making a gang of money, Oh wow, I’m right. Okay well, maybe tomorrow it will go even higher, not so much. And then finally you are back down here with the air let out of your tires and then it sinks all of the way here. This is a case where, hey, a pretty good entry turns out to be a loser. However, think about it, what did I say at the outset? This would be a good entry, I don’t know if I mentioned this or not, but if I didn’t, I should have, this would have been a good entry for an initial position, an early position.
This is one where if you are a sprinter you kind of get the guy with a gun shooting blanks kind of looking the other way just before he fires it. And then you get out of the blocks early, then he fires the gun and you are already up 5 or 10 yards from everybody else. So this is literally like the false start entry that you didn’t get called on. And what you are looking to do is, get the stock, get in early, and then when it breaks out you get more.
The reason you are not buying more right now is because you don’t know what it is going to do but you think you do. So you take a little position, a little starter position, a little probe, and it turns out the probe didn’t work out, Okay, so what do you do, move to another stock? No, you move to another day. You watch the stock, you keep watching it. It broke out again and then here we are now. Now we are getting kind of a second test of this move higher.
And so I would just say this, if the stock starts trading above 650.00 and stays that way, that would be a pretty good entry. If, on the other hand, it falls back, then you watch to see if it’s holding. You watch to see if it’s holding in the low 600’s, 600.00, 610.00, something like that. And if it does that’s when you take the entry. It’s a very similar entry to what could have been done back here.
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