“Don’t Taze me, bro!” Here’s your trade on Taser International (TASR) (February 17, 2016)
TASR
I want to look at Taser ( NASDAQ:TASR ) here. First, the company reports earnings in 12 days, on February 29th. We’ve got plenty of time to get in and out of this trade. Look, this is in a volatility squeeze. I really like the way this is setting up. When I see something like this, the stock has come down quite a bit, and you all know what Taser ( NASDAQ:TASR ) is all about, right? Shocking! When I see a volatility squeeze like this, and at the same time testing this trendline; and on a shorter duration here, actually breaking though the trendline. This kind of a volatility squeeze, really, really tight. All I’m looking for is one thing, higher volume. And that’s actually what we got today. Just about average volume here, but this is average volume over the last 50 days. And over the last 50 days we got some pretty big, massive volume spikes. So lets say we drop this, make it 20 days, it changes a little bit, not that much. We can make it 10, we can make it 15, and this will go up even more. The bottom line is, this is popping out of a volatility squeeze, so it doesn’t really bother me as much that you’ve got two up days in a row, that the stock is up over 10 percent in just the last two trading days; because it’s coming out of a volatility squeeze.
So my suggestion would be, you go ahead and take this trade, I’m talking about a LONG trade, to the long side. Buying the stock and then just see she trades up into earnings. Again you’ve got 12 days before earnings and this stock is starting what I believe is an earnings run. One thing, in case I’m wrong, because I know you’ll find this very, very hard to believe I do, but I actually am wrong sometimes. So tipping a hat to that possibility, you keep a trailing stop on this position. And put a trailing stop on of say 8 percent, start even with 5 percent. Wherever you buy the stock, if it falls 5 percent, you don’t want to be long. By the way, it’s up just 5 percent today, so you get an idea of what the magnitude of that is. It would have to be a complete REVERSAL in order to stop you out. I don’t see that happening. So you take a little bit of stock, as the stock starts running you know you’ve got your 5 percent stop in and then you take a little bit more as the stock is rewarding you for being right. And if the stock is not rewarding you for being right, well don’t buy it on any pullbacks, because that’s not what volatility squeezes are all about, not right now, this is still in what I call phase one. And if you want to know more about phase one, phase two, phase three, you’ve got to be a member of Stock Market Mentor.
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