Take a look at T-Mobile ($TMUS). It looks like the bulls are about to get paid off. (September 07, 2019)


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Every once in awhile I will see a stock that almost seems like a layup and so I will want to kick that out on a Chart of the Day video. That’s what I am doing here on T-Mobile ( NASDAQ: TMUS ). The reason is purely technical.

The stock, on Friday, broke out above this upper Bollinger Band; they have been very tight, less than 3 percent. If they are 6 percent wide or less that’s, in my book, a volatility squeeze, maybe 5 percent would be a little more like it, but these are so tight. And if you look at the stock, I am going to show you the volume, you see the stock, over the last few days, we had one distribution day here on light volume and then over the last three days it had been picking up; increasing volume, and then finally on Friday heavier than average and a breakout, which is not very common on a Friday. And so I am looking at this as institutional accumulation.

I think this is a stock that you can buy on Monday. The cool thing is, you can have a stop that is set maybe even less than 2 percent. So you are buying this stock, keeping it on a very, very tight leash, keep your stop a little bit below the 50-day moving average, about 2 percent. Not 2 percent below but about 2 percent from where you are buying it here, if you are buying it at, let’s say, the closing price. Why do you keep it so tight? Because; if the stock falls back below the 50-day moving average you don’t want to own the darn thing anyway. It has been drifting around here, with a little bit of an upward bias, sure, but it has been drifting around here for a month. Why do you want to get caught in that mess? It doesn’t make sense.

You look at this stock and you see that it’s a squeeze. I don’t know whether it’s going to come back and test 85.00 I just think that it is probably going to run through 80.00. And then you just kind of ride it, let the trade develop and see what happens. But this is a good entry, it is a good low-risk entry on a stock that is technically working and starting to pay all these patient folks off. So why don’t you get on board before the train leaves the station?

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