Square Inc Stock Chart Sets Up Swing Trade 2-14-20
Good morning and welcome back to Smart Money Alerts for Friday, February 14, 2020.
Today's trade setup requires patience.
This week I wrote about forcing a stock to show you proof. Certain situations allow you to enter with a buy-stop order on a breakout. Certain situations call for confirmation.
Today's trade calls for confirmation, or proof the breakout is real. "Real" means buyers show demand and create higher prices and then hold the bid. Meaning higher-highs and higher lows after the breakout.
Square Inc SQ traded into major resistance this week setting up a potential run to $100 over the next seven days. I am waiting for a close over $82.50 (on the daily chart) to trigger my entry.
A quick tip about setting profit-targets...
I'm often asked "How do I get the most out of my winning trades?" I think it's an interesting question/dilemma but the answer is quite simple.
Research what the stock normally does. In other words look up it's "ATR" or average true range. And then factor in the typical momentum move for stocks which is 4-6 days (a day or two more if strong bullish order flow).
So for SQ the ATR is $2.40. That means the stock typically trades $2.40 from high to low.
Using these two simple metrics you can forecast your profit targets.
Then you just need the patience to hold the winners! 🙂
If you have any questions send me an email: email@example.com
Have a great day!
PS. The stock market is closed Monday for Washington's birthday.
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