Looking for an aggressive trade for Monday? Try Inseego (INSG)! (January 11, 2019)


Inseego ( NASDAQ: INSG ); I mentioned this the other day to our members. A volatility squeeze; a breakout of $4.00 up to 5.50, that’s a pretty significant return in a fairly short amount of time. That is a textbook volatility squeeze breakout Phase 1. That was then; this is what it looks like, a breakout 4.00, up at one point 36 percent, it runs up $1.50, that’s a pretty monster move, right? I didn’t see it so I am not going to tell you about the great trade that I actually didn’t make, I will let other people lie that way.

I didn’t see this but I saw it right around here. My thought was, okay, I needed to wait for Phase 2 to run its course. And Phase 2, for those of you who are uninitiated, Phase 1 is the breakout Phase 2 is the pullback. The idea is, the pullback really has to hold ABOVE, hopefully, even higher, but above the initial breakout area, you don’t want to see it falling clear back into the prior congestion area. That’s a sign of weakness, not strength; it’s a failed breakout. You want to see it hold above, in this case, $4.00 or so and then start to take off. So it pulls back, that’s Phase 2. Once Phase 2 runs its course we look for Phase 3, which is the 2nd rally. After the little correction now we look for a continuation rally.

So here we are, we got our little Phase 2, just a couple days, we are literally in Phase 3 now, the buy signal was at 5.50. And so you can look at this on Monday, this may turn out to be a really good trade. Earnings aren’t an issue; it’s fairly liquid, over 2 million shares. You can see how over the last 6 trading days, since this breakout, this has been a really strong stock, a lot of volume for this stock. So because it’s already extended so much I have to say this would be an aggressive trade but that’s okay. Some of the best money is made on an aggressive trade.

I would just say go into it a little bit light. For very active traders if you are watching, you have got to be watching the stock during the day, like Monday morning, you have got to be seeing what is happening here. Have a good risk management profile. Don’t be trading too big to where you can’t get out if you’re wrong. My bet is, that this could be a pretty good runner here. So just trade with good risk management rules and I think you will be fine here.

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