Check out this breakout on SendGrid ($SEND). Looks like tomorrow is “Day 2.” (June 14, 2018)


I want to look at SendGrid ( NYSE: SEND ) here and this is why: On the daily chart we see this kind of pinch here, where the stock has been trading lower lows. You can draw the support level any different way you want, one way could be here, kind of a flat triangle. These are all approximations. When people get out their rulers and they start measuring to extreme degrees, it is a little bit amusing to be because stocks don’t trade THAT precisely. This is a flat level here at $25.00 or you could look at it this way. Fine, but either way when the stock popped up here above $28.00 today, that was where you are buying the stock.

I think the stock still has room for upside. Now, the downside would be around 26.50. If the stock falls back down below 27.00 and into this 26.50 range, well then your conclusion has to be that the stock is still mired in this base here, it is still forming a base. So the idea of buying the stock is, okay this is a breakout now we move higher. A continuation pattern, now we are on the next leg up.

So what is it going to take for me to think, gosh, I am wrong about that? What it is going to take is not just a little pullback like this, you get that, it might happen tomorrow. It is going to take a pullback that goes right back into this cluster here. Because that will tell me that wait a minute, the way this stock was trading today I will bet there are a lot of folks that missed this move, that didn’t catch it at 28.00, they see it and they would like to buy it. If I am correct then any pullback to 28.00 or below should attract buyers. It should scare up that demand to where traders are saying, “Okay, here is my second bite at the apple, I’m in. And the stock will firm up here, it will catch plenty of demand; enough to soak up supply from this little pullback and then we are off to the races again.”

So by just thinking about it in this way what I have enabled myself to do is decide where I am going to sell. Where is my drop dead thing going to be? And I would say, right around here, 27.00ish, 27.25. As long as the stock stays out of this box you can go ahead and buy this stock and you are good to go. That is how I would trade Send ( NYSE: SEND ). Your next buy signal on this would be above 29.42. Set an alert, as I am here on my little TC2000, we will say 29.45. I want to know. If it is moving we will restart it 5-minutes later. So I want to know if this stock breaks out tomorrow and if it does I am in.

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