Plenty of mojo in this high momentum stock. Let’s take another look at Momo (MOMO). (April 10, 2017)
I want to look at Momo ( NASDAQ:MOMO ) here. This was one of the best performers today. It has been the best performer, in my book, for quite a while. I just want to look and see where we are right now. You can see this stock, high volume breakout today from a volatility squeeze, right there. Big, bad tight squeeze there; we like this. We also like the way this thing has been setting up in the past. Consolidation, a couple months long, right? You can start drawing the cup and handle any where you want but this is just a nice orderly consolidation. Though, if you bought it up here at 28.00 and were still holding it down at 17.00 it probably didn’t feel particularly orderly.
But the stock is now right up to where it was before. A little pullback and then, Boom! A breakout on earnings. You can see my diagrams here as we have been tracking this stock. Frankly, it first came to my attention at 23.00, that’s been the first trade. We see the stock ultimately broke out above earnings and then kind of drifted sideways. I have been talking about this stock with members in the forum for a while now, and good for you guys.
So what happens now? I don’t think this breakout is a fakeout. I think it still has room to run. For one thing, there is still more than a month to go before the company reports earnings. You can see what they do. They have got a few million users, here and there, on their platform. You can see where all these buy points were. If we go out and look at the weekly chart, a couple things; first of all the stock has not been trading long enough, in my view, just over two years, it hasn’t really been trading long enough to give you a real good technical take on what the big swings are. It just hasn’t. So as I look at it, the stock is still kind of in uncharted territory and it is all heading north.
This was the initial, what I call ‘enthusiasm high’, finally a breakout and then a pullback to test it. And now everyday that this thing closes higher than the last, is a new all-time high. We could try measured moves, I have been looking at that type thing. So, “Okay, well gosh, from down here up to here, yes, that is pretty good.” It is about $10.00, we will call it 60 percent. We will drop this down. Then after the next breakout, after the next move here, okay, what is another $10.00? Okay, right up here, right about where it is now, around $38.00. So if we say, “No, I think it will go up another 60 percent like it did before.” If you want to use percentages, fine. It basically takes you to $45.00.
You know what? That works for me. I have just told you, my price target on this stock is $45.00. How did I get there? Just by stretching some lines across the chart and picking a number that is higher than it is right now, because I need some kind of target to shoot at. But what you really need to know is this: The stock has really strong upside momentum. It is in the right space, social networking. It is in the right country, China, and it is moving higher. I like that. You want to stay long; I bought some more today, not going to be buying any more, I don’t think anyway because I have got a full position. I am going to ride this puppy until she bucks me off, and I don’t think she is going to buck me off for a while.