Here’s a quick trade on Lattice Semi ($LSCC) (December 02, 2021)

by DAN LSCC 
I want to talk about Lattice Semiconductor ( NASDAQ: LSCC ). This thing has had a heck of a fall over the last couple of weeks, about 15 percent. Not as much as a lot of them but this has been a pretty steep fall. But here’s the thing, every time this hits the 50-day moving average, that’s where the bottom is. It ultimately rebounds, it did it here, to the day. Here, you had a rebound, it took a while here and here, but ultimately, the trend asserted itself.

Now, the steeper the 50-day moving average is, the one that is being rebounded off of every time, the steeper this thing goes it gets further and further away from the 200-day moving average, so it’s extending. The stock is extending higher and higher and higher. So the more this moving average diverges, the riskier it gets.

Any rebound that starts occurring when the 50-day moving average is this steep is going to be muted you are not going to see this kind of thing. We have so far, but what I am saying is, as the 50-day moving average steepens the likelihood of this kind of move is lower and lower and lower.

Even if you stick in this time frame here, this was drifting sideways. All of this here was essentially kind of sideways drift. This is a little different now because this was actually fairly steep, a little bit steeper pullback than we have seen from the prior ones. I could go on and on analyzing this chart but it’s not going to make you any money and it’s a waste of my time.

I will just get right to the point, I think this stock, it’s got heavier than average volume today, I think this is set up for a rebound. So this is how I would trade it, I would look at the 50-day moving average, I’d look at the intraday low of 72.50 and I would go, okay, I am going to put my stop, a really pretty tight one, just underneath that 72.50, maybe 72.00, I don’t know, but that is how I am going to trade this.

Then I will look for this kind of move. If it gets back up to the mid-80s, I will be pretty happy with that and I will sell; because in this kind of market this idea of holding stocks for a longer period of time and bigger moves, some of them certainly lend themselves well to that, but a lot of them don’t. You can make money on them but there are quicker trades and the percent profit is less, less than it usually takes.

So the real idea is, you have got to be really, really merciless with your stops. Don’t take a lot of risk on a stock, and then when it is paying you off be quicker to take profits than you normally would. That is how I would trade Lattice Semiconductor ( NASDAQ: LSCC ).

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