Flying High with $AESI – July 24, 2023
This is Dan Fitzpatrick, and today I want to look at Atlas Energy Solutions ( NYSE: AESI ). And why? Well, you should be able to see right here, this is a big breakout today.
It continued a little tiny move here above 18.50 and ran through this last high here. The high here was 18.95 so if you really want to be strict about it, the stock could only be bought when it ran above 18.95. That is the typical way that many traders do. I have an IPO strategy that is very similar, this doesn’t quite fit that, but close enough.
A lot of people look at this right here, they look at this as the high, and that is where you buy. For me, I would even look here or maybe here. And why? Because there is a lot of price action between here and here. A big massive washout. 19, maybe 20 percent downside. And then a big whole lot of churning here.
So in my mind, this is really not a particularly relevant level right now. So my sense is, that you are actually kind of getting a late start on this. This is a woulda coulda shoulda thing, but it could have been bought last Thursday. Shall I just say, the smart “asterisks” among you would say we should have bought here?
Yes, but that is not really the trade that I am talking about, I am talking about a breakout trade. And so when this stock ran above this level here, I am really giving it here, 17.75. Think about how much of a head start you are getting, as opposed to waiting for 18.95. You are getting $1.20 at a lower entry, which is pretty good for an $18.00 stock.
That was really where I would say the best entry was. But let’s look at the intraday chart here. I’ve got a 4 window thing here and you can look and see this, the daily chart that you were just looking at, and the 30-minute, and the 5-minute, we will even make this a 15-minute, and then we will make this the 5-minute chart.
So what do we see here? Well, the stock made a big move first thing in the morning. And then after the first hour of trading, we just started getting a sideways trading range here. And so I would really expect the same thing tomorrow. So what are we doing? Why am I showing this stock?
I really don’t think it is too late to buy this stock. This was institutional buying, you can look and see the volume bought, this is the highest volume there has been since back here, actually, when the stock, it turns out, bottomed at that point. And after that, it has just really been kind of all uphill from that level.
So my sense is, that this stock is probably going higher. It will wiggle around a little bit, that’s the way of volatility. But if the stock runs above 19.73, that is a good time to be buying the stock. And by the way, if this was truly the technical buy point, at 18.95, I wouldn’t buy something at 18.95 I would buy it at 19.01 or something.
If that was truly the entry-level, you are just 2.5 percent below that textbook entry. So you are not really late. What I have to suggest is, that if you are looking to buy this stock just remember that things don’t go straight up, so we could get some backing and filling here.
But what my bet is, that the $19.00 level is going to hold. And if it doesn’t, I would use today’s open at 18.86 as a reference. So if the stock falls below 18.86, that is a 3, 3.5, maybe 4 percent risk from where you are buying it, I think that is going to work.
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