Here’s the trade on T-Mobile ($TMUS) (September 11, 2019)


I want to get back to TMUS here, T-Mobile ( NASDAQ: TMUS ). I mentioned this the other day, right here on this day. Last Friday when this had just kind of broken out I mentioned this in my Chart of the Day video. I want to follow-up on it, here’s why: Because I said, “This is a stock that you can probably buy Monday.” It seems like it’s moving higher out of this volatility squeeze, pretty tight Bollinger Bands, move out on heavier than average volume.

This is just the type of thing that we look for. It’s a pretty big sell-off here in the not too distant past, about a month prior. That is a concern but it is not fatal to the trade, it just means when there is so much distribution from higher levels so recent in time there is still going to be a lot of regret in the stock and you are probably going to get selling pressure coming in on any move.

And so then Monday what happens? The stock really didn’t do much, it probably closed flat on the day, it didn’t really do much. However, it did print a higher high and a higher low intraday. That means the bulls got stronger and the bears got weaker. That’s what intraday higher highs and higher lows tell you. Then the next day, well, let’s just say it’s a little bit of a reversal. But what happened? The stock just came back to the 50-day moving average. So this breakout kind of turned out to be a fakeout, oops, so the stock is down there. Well, where is it now? After today it rallied up to a new high on heavier than average volume here.

This to me is kind of like giving you a second chance to get in. Again, the one thing that makes me a little leery about this is, all of this selling here, you extend it out and the stock could find some supply. So I wouldn’t really look for this kind of move higher. I think there is still some supply that it is going to have to chew through and soak up. But it is a chart that is working well now so I think you can be buying this stock. Make sure you have a protective stop. I would not hold it if it falls back below the 50-day moving average but this is a stock that I think is going to reward you so I want you to check that out

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