Here’s your trade on Sprint (S). (August 01, 2017)
We are looking at Sprint ( NYSE:S ) here. The company is going to be bought sooner or later, right? Everybody is talking about who is going to buy Sprint ( NYSE:S ), this and that. The company reported earnings today and they were pretty solid; you could see the stock is up over 10 percent. Here is my thought: I think this stock can, and probably will go up at least to test $10.00. Is that a valuation call? No, just looking at the chart. This has been in a base for quite a while, earnings are good. We didn’t know and we still don’t know, you never know anything for certain in trading, that is why it is called trading or speculation, as opposed to winning or money harvesting. This is a base, then it is definitely going down, and then maybe it is a base, maybe it is going down.
The bottom line is, this has been drifting sideways and really kind of challenging shareholder’s patience for quite a while, and it still is in that range, so I am not exactly pounding the table on this. But what I am saying is, I think the stock is going to stay above $8.00 simply because there is so much conjecture about them being bought. That really gives you a little extra cushion to the downside; plus just the 200-day moving average. The closer you buy to the 200-day moving average the better you are. You are about 7 percent above that level now. You may not get the chance, it is hard to say.
I don’t like to buy a stock that is up 10 percent, but if you are an active trader you set a price target of $10.00 and take a small position now. You can see the first moves are in the morning, on the upside and the downside, you get these big moves. So tomorrow morning when this stock opens up, if it is a little bit higher then consider taking some stock. Your preference though, would be for the stock to pull down. Maybe everybody got a little lathered up, a little ahead of themselves, and so tomorrow the stock pulls back a little bit. The closer you can get into this range the better off you are as far as kind of building a position.
The real takeaway on this chart for me is, that I feel like right here is a pretty good area of buying. A pretty good support level right around here, maybe a little bit higher. As long as the stock stays above this level, like above today’s open, then I think this is good to go. You have got to be patient with this, but not too much, because it has been drifting for quite a while. This kind of action off of a good earnings number we expect this stock, if it pulls back you take a gift and say thank you very much and buy the stock. Ultimately we expect it really, really soon to move above this level.