I wish i had time Friday to scan for this. This is a classic ichimoku bullish breakout. If you dont know much about Ichimoko I highly suggest you learn it as it will increase your trading consistency.
Note that I am using Heikin Ashi candles to eliminate noise during the breakout. Very important!!!
Here is the breakdown of what is needed for a Kumo cloud breakout.
1) Lagging span crosses cloud 2) Conversion line (blue) crosses base line (red) previous to price breaking the cloud 3) price CLOSES above the cloud 4) span A (green line) crosses above span B (red line)
this stock meets all criteria. I will be buying heavily on short term call options on this on Monday and a light position on longer term call options (sept expire)
My predictions: 1) Most likely: Continued above average volume. prices increases greater than the ATR. 2) What may happen: price may pull back a little but see resistance of the on the blue conversion line at lower time frames (ie 4H) 3) Worst case: Price closes below the 13 SMA on the 1 day chart. SELL.
you will notice that the stock has been consolidating since about 6/23 and has broken the upper resistance and trended higher. So what not buy on the break of resistance???? Simple, False breakouts. Ichimoku is the near fail safe to save you from buying into a false breakout and losing money and i only buy breakouts upon confirmation.... 100% confirmation of the 4 principles above for buying a break out.
Sure you dont catch all of the run, but the odds are very high in your favor for a nice return.
So when will i sell the options?? 1) If the price rises like mad and pulls drastically away and above the 1D 13 SMA. (~10% above 13 SMA) 2) when price closes below the 13 SMA on the 1d Chart. I'm out
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I bought some Calls today on the pullback. I will buy more tomorrow if the price is flat to slightly higher @ open