Is this the breakout we’ve been waiting for on $GSHD? Watch this video to get my take. (August 26, 2019)
GSHD
Today, here’s what I want to look at, Goosehead Insurance ( NASDAQ: GSHD ). This came up on my scan as potential breakouts. The stock has been squeezing for a bit, not super tight but tight enough relative to the way the stock is trading. It popped back up above the 50-day moving average and the more recent high was up here at 46.80 so it’s just really $.54 below where it would break out.
So this is where I would do this trade; I would set an alert for 46.00, make it 46.50, 46.60. If the stock hits your price alert and if the stock is trading at above-average volume and I’m pretty sure it probably would be if the stock has enough juice to push to a new short-term high here. Then that’s when you’d buy the stock and then you would keep a stop just a little bit below the 50-day moving average. And certainly at the very lowest below this intraday low of $44.00, we’ll call it.
So you want to have a fairly tight stop on the trade because you’re buying, I can’t really say you’re buying a breakout, I mean I guess you are, it’s at a new high but the stocks in the squeeze now and it’s not like it’s breaking out above 50.00 it’s really just starting to push higher. And then maybe expect a move to $50.00 before it finds some kind of resistance. But this is a pretty risky market right now and most breakouts are not working, they’re just not being sold into.
That’s kind of how you can tell how strong a market is, you look at various stocks that breakout. Do they follow through or did they get sold into and fall back? You can really tell a lot by just looking at breakouts. Here, I would say you got to be a little bit careful of this. Again, require it to trade at above-average volume and on any kind of a breakout. And then set a stop a little bit below on the 50-day moving average and then that will take care of that trade for you.
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