- Jason Bond Picks (Member)
- Posts
- SERA game plan
Good afternoon,
SERA is a news winner I alerted, then bought, at $7.08. I’m ½ size for now.
When a stock is up 200%+ the first thing I check is Dilution Tracker to get a sense of whether or not they’d be looking to raise capital into the spike.
Here’s the snapshot showing low risk across the board. It’s not a guarantee but is a very good gauge when making a trade plan.
From there if I think the stock is going to make another move higher, in this case $10, $14 or $20, I turn to technical analysis. In this case the stock is up so much a daily chart does us no good. There is no price action anytime recently to draw support and resistance from. So this is where we use Fibonacci Retracement.
A strong stock should find support above the 61.8% level. The higher the support it finds, the more demand there is to get into the name in anticipation of the next leg up. Which makes sense. If a company has great news and traders think it’s going higher, they will bid at 38.2% or 50% with the last line in the sand 61.8%. Because the dilution risk is low here and the company IPO’d at $16, I came to the conclusion that if this is to go to $10, $14 or $20, it’ll find buyers around 38.2%-50% Fibonacci Retracement or $6.89-$5.98. So far we’re smack in the middle of those levels.
A 3 year weekly chart shines some light into the ranges ahead, should it continue higher like I think it will.
For now this is likely a swing trade for me so I can see if it runs for a few days or loses its momentum. The risk of holding overnight is dilution but as I posted above, that doesn’t look too likely, but anything is possible. In an ideal world I get $2-$3 / share for my effort here. I’ll keep you posted if plans change.
Jay
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