Here’s your trade on MP Materials ($MP) – August 31, 2022
MP
I want to look at MP Materials ( NYSE: MP ) here. I will show you a different kind of trade, this is not really a momentum trade. There are a couple of things going on here that I like.
First of all, if we just look at the trading box that this is in. This is at the bottom part of the box, so if you are buying here, if you are giving it a lot of room you are risking 5 percent. But you could really even tighten it up a bit more if you want. Let’s say you are risking 5 percent, if the stock falls out of the box below the 50 you are done.
But what happens if it continues to run? Well, if the stock continues to run you could get a really nice move all the way up to the top of the box, $40.00, hey, it’s happened before. How about this, 38.00 even? So if you are going here, you get the move up to 38.00, that’s 8 percent, 8.5 percent. You get it up here, 10 percent, so you get the point, you are risking 5 to make 10, we’ll say. And the nice thing is, it is a higher probability trade because we have seen the rebound before.
I look every day for these trending stocks that you are buying on little dips or on breakouts and riding them on to glory. But we are not seeing that kind of market right now. Most of the breakouts that I am seeing turn out to be fake outs. But his type of thing, I like the way this is trading from a standpoint of buying the stock and getting a nice quick little flip here with very, very little exposure.
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