This $2 Stock May Take Off on Feb. 5th

When the market was beginning its correction in October 2018, this little known stock was beginning a massive turnaround.

Then, in November it announced better than expected earnings, which ignited its turnaround and led to its move from $1.40 to over $2.

Now it’s poised to jump again

Next week this hot tech stock will announce earnings again.

It’s always risky to buy a stock before an earnings report because these events can create large moves in either direction.

However, regardless of whether you want to enter before its February 5th announcement or wait, this stock has two patterns you can potentially profit from.

First, its strong trend in the face of the market correction, powered by its last earnings report, suggests that a positive earnings report on Feb.  5th could accelerated its already strong trend.

Second, it has a history of consistently stopping at its 50-day moving average.

If you look at the dark blue moving average on its chart, you’ll notice that while in its up trend in 2017, and in its down trend in 2018, every pullback to this line represented the end of the correction until the line was broken. Then the trend changed.

https://lh6.googleusercontent.com/B2hEh02f6gnPauZOYEoJ3DEWEcfyKaZyvjwj7gObfLRgWD4kT_9NviXureTEX-fdlCGnPLi8h3v4NiZVkKk10xGLZCFHagB0_hh6mjABJqagD5rdyShpEZj35QcXJq-5MgE_GoEX

This pattern in the 50-day moving average enables you to use it as a reliable protective stop for your trade and stay in the current uptrend until it ends.

Currently the average is at $1.94 so I would put my stop under $1.90.

In order to keep the trade risk to $0.40 it would make sense to enter for $2.30 or less.

That makes its current price attractive. It’s even more attractive if next week’s earnings report sends the stock higher.

If you have a high-risk tolerance, entering before the earnings has big potential.

If you prefer to wait until the earnings are announced, then look for pullbacks to near the 50-day for entry points with stop $0.05 under it.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily