Is it too late to buy Applied Optoelectronics (AAOI)? I don’t think so. (May 05, 2017)
Applied Optoelectronics ( NASDAQ:AAOI ). This is in the fiber optics industry; really, really strong earnings per share growth (EPS). Really strong, it is actually pretty stellar. An IBD stock, sideways consolidation, they report great earnings, right? Look and see what happened to the stock. Huge volume, almost 11 million shares and the stock popped out of a volatility squeeze. It had been really a nice sideways drift.
What I like about this is, that it is not a breakaway gap. It is not really too hard to buy right here. Typically you like to get these stocks before they break out. But with the stock just a few bucks below where this all-time high is I think you can actually take some stock right now. Not a lot, it would be nice it would even pullback a little bit, get some closer to the 50-day moving average, closer to $50.00 or so. If only, maybe so, we never know. You are taking some stock here in this channel, this $50.00-$60.00 channel. We could even stretch down to 45.00. So you are buying some stock in here. And if the stock pulls back, you are buying more, and decide, is this a trade? Or is it a stock that you want to own for a while?
For my money, it I would actually be a stock that I would want to own for a while. You look at the way this chart is setting up, $25.00 was the breakout, now it is up almost to $60.00. The industry is smoking hot. This company is making a lot of money and they are growing their revenues and their earnings. The only thing that is not to like here about this is, I didn’t buy all of it down here at $8.00. So yes, I think you can buy this stock now. Even though it is up almost 20 percent in a day, I think you still could start scaling in, I don’t think it is too late to buy this stock. So take some now. Add to it. If the stock breaks out above $60.00 then you are off and running on the next leg.