How would you play this type of resistance

Discussion in 'Technical Analysis' started by cashclay, Jun 9, 2018.

  1. cashclay


    On this chart is TRXC. It just got a FDA filing for one of its products. However when I look at the chart theres three resistance points. I come across these types of charts all the time and even with news backing them Im still a little confused on how to play. Should I wait until it breaks high of the daily chart? But by then it could fall back down I wouldve missed the bulk of the move.
  2. tomorton


    This is a stock that has doubled and halved repeatedly in the last 5 years. This is a lottery-type stock which I would personally avoid. You could play it using regular TA but I suspect it would be hard to trade due to spreads and unpredictable price quote moves. Or you could just take a small position using money you can afford to lose and wait for it to double: it might.

    Either way, price is in the highest part of its range over the last 1 year, 2 years and year-to-date, so the odds are you'd be over-paying for a long position at this time.

    I'd never consider shorting a stock that's so volatile.
    murray t turtle likes this.
  3. cashclay


    Yes i know but this movement is not a pump; its actually backed up by news and credible one at that. Im asking if you were to play this and seeing there are multiple resistance points hwo would you? Hypothetically speaking.
  4. The volume suggests you to short it.
    murray t turtle likes this.
  5. tomorton


    There's no point selecting a stock like this unless you expect price to double. In an uptrend I ignore resistance and prefer to keep pyramiding but with something like this I would put a TP at a 100% profit level from entry: I'd still ignore resistance. My preferred entry would be back down in the lows of the year, but immediately after the start of recovery from the recent pull-back would be OK.
  6. wrbtrader


    Investment purposes trading in and out. Yet, if you need advice from a forum for "trade decisions"...stay away from the markets or go find an alert service so that you can hold someone accountable.

    Xela likes this.
  7. cashclay


    Why do you say that? The volume seems pretty evened out and not on the low side when compared with days previous.
    murray t turtle likes this.
  8. No signs for the continuation yet.
  9. Handle123


    Looks like a stock to sell to me, developing "rounding top", it did fill the gap, so if you just have to get in, entry be Friday above Thursdays' highs Looks like a bunch of traders waited for gap to close and bought above the previous days' high, options side looks decent, and my systems give sell signals and would look for selling patterns on Monday, H&S might be forming, but would do the options. This company stats are in the "red"? I do like medical supply companies like SYK, but this company is not them. All companies have beginnings, but I have enough wallpaper of companies I bought in my youth with huge dreams. I rather wait few years then on across the board major decline of the market buy "core" of stocks like in 2009.

    And volume can be tricky, can't compare to last day, I see that you might be already in from higher? Volume can be major players getting out as stock rises. I would only do the options for limited risk. Always better to Buy low and hedge, like in February when it got flat for couple weeks, that be cheap entry in risk. Better to think in terms of risk and never reward, your risk is very low, you can buy more of it and risk very low, you buy up here when your emotions have the best of you, you buying expensive and risk is extreme, think smart.

    Good luck.
    beginner66 likes this.
  10. deaddog


    To me it is not worth the risk.

    The buyers last October are just getting to breakeven.

    The gap up on volume on the 2th looks like distribution.

    It is a lotto stock

    Good luck.
    #10     Jun 9, 2018
    murray t turtle likes this.