Aug

Stock Trade in HL – Buying After a Multiple Bottom

Took a small trade today in HL after spotting a potential trend reversal off a multiple bottom chart formation. Here’s a view on the 30-min chart.

The stock price seems to be respecting the 6.50 level. The buyers step up at that price and it hasn’t violated 6.50 in a few days. Exactly one year ago, almost to the day – the stock bounced off the same level and never went below 6.50. Looks like a potential bottom. The stock is extremely oversold and offers a decent trade as I can take just under a 2% risk with a stop at 5.49.

The green line represents the entry price at 6.62. the red line is where the stop-loss is at 6.49.

Since the stock is moving sideways I took a 1/2 position and will look to possibly take the other 1/2 on a break of the downward sloping white line. Depending on if and where the fill occurs the initial stop will get moved up. Regardless the risk will be kept under 2%

I’m looking to scale out on a 4% and 8% move up, maybe keep 1/3 with a 12% target.

We’ll see how this plays out…

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