Here’s your trade on $CROX and $SKX – July 19, 2023
Dan Fitzpatrick at StockMarketMentor.com. I want to look at Skechers ( NYSE: SKX ) today because the stock is just kind of meandering out of this range.
I have drawn that line there, there are so many different lines you can draw in this chart to help you understand it. But I think, probably, the most important one is the one at 55.00, right there. Because that is where the stock has tried and failed to get through on at least 3 occasions, yesterday, here, and then here (actually, at most 3 occasions), and then today of course, I guess today would be the 4th one.
So the idea is, you want to wait until the stock breaks out above 55.00 before getting involved. You could say, Well, why would I want to do that when I could buy it here at 54.26, or 25, we’ll say, mental math, so I get a $.75 head start on the trade? Yes, but we don’t know that the stock is going to break through 55.00. It sure didn’t get it done yesterday, it didn’t get it done back here, or it didn’t get it done back here.
So you have to just assume, then, if you are buying it now your ceiling is about $.80 or so, $.75, before the stock stalls. So you don’t want to be doing that. You want to wait until the stock breaks through this resistance, and it should be on higher volume. Because then what that has done is, it has transformed this resistance level into support. That is how you want to trade something like this.
Now, just a quick catch-up. MicroStrategy ( NASDAQ: MSTR ) on at 328.00 a month ago. This has had a heck of a move, and you will see how we have been elevating these stops, we just keep raising these stops. I just thought I would show you how we are trading this type of thing. It had a really, really nice volatility squeeze right around the 50-day moving average. When you see something like this, this is your move. And then it has traded along the 8-day exponential moving average, so we just keep stops relative to that.
And then the same real thing with MARA ( NASDAQ: MARA ) here. We got the same kind of identical type of breakout, not really identical, this was actually better. But the stock just kept going, and then yesterday it fell down and almost hit our stop at 16.40. But you can see how the stock is in for a bit of a rest here, but the trade continues.
The idea for trading these rocket ships like this is, you just always want to keep raising your stops so they are always protecting your gains. And when you have got your gains protected, you know exactly where you are on the trade. Then you can be more patient in letting the trade work for you because you are not always all wrapped around the axle, wondering if you should sell. You just have a series of staggered stops that really allow the stock to be on autopilot.
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