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Strategies & Market Trends : Ask Vendit Off-Topic Questions
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To: J.K. who wrote (8026)4/21/2005 6:46:08 PM
From: Walkingshadow  Read Replies (1) of 8752
 
Hi JK,

Nice move, but I think IIG will run into problems at the 200 sma.

stockcharts.com[h,a]daclyyay[db][pb50!b200!f][vc60][iUk12!Ui5,3,3]&pref=G

There is an outside chance that the stock will maintain enough momentum to successfully challenge resistance. So if I were trading the stock and bought in at $8.50, I'd take partial profits right here by selling at least half the position. Then I would tighten the stop on the remainder, and keep adjusting it upwards figuring the odds are that the stock will get turned back from the heavy resistance zone overhead that begins at the 200 sma (the declining 50 sma is just above that as you can see, and there is chart resistance there also).

You even have the luxury of setting the stop under the low of the day, which would be a 10% stop. That's one possibility also if you really feel this stock ought to have some legs, but I would try to ratchet the stop up as quickly as possible to preserve profits in the remaining position. Although IIG is at the top rail of the BB, it is not all that overbought yet:

139.142.147.218

Another approach is to use intraday moving average support as a guide to your stop:

139.142.147.22

This is probably what I would do.

Note that the stock is heavily shorted (25% of the float), but this is only about 4 days' trading volume. That means to me that there is moderate chance of a short squeeze, which will add wind to the sails:

finance.yahoo.com

T
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