Here’s your trade on Dynatrace ($DT) (December 03, 2019)


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I want to look at Dynatrace ( NYSE: DT ) today. You can see where it debuted here back in August. The high, what I call the enthusiasm high was 27.48, we’ll make it 27.50, so you can see where the high here was. Over the past few weeks since the stock bottomed here this has been on a tear, really running up nicely. It is now up almost 50 percent from this last low.

I am looking at buying this stock here and this is how I would do it: If you look at 27.50 as the high the obvious time to buy, actually, is if the stock breaks through 27.50 on volume, that’s the time to buy the stock. And that’s when I would make an entry. However, if you want to be even a little more aggressive look at it this way; the high here today is 27.19, the high here last Wednesday, on the 27th, was 27.13.

So really I would say, if the stock moves above this 27.19 tomorrow you could start a position then, it’s not too early, but it’s close to a percent actually. So you are buying the stock when it hits a new high relative to today’s move. The reason is because this last high back here, this is a long time; this is almost 4 months back. And with all the trading that’s gone on between this high here and where it is now, you have got to figure that anybody who bought at a higher price than this, probably about 5 people, and they have all either sold, died or are planning to just hold by now.

I think you can be taking this stock right here right now. What you would do is, you would keep your stop, give it about 6.5 percent, maybe 7 percent, because you could see a stock like this bump up against this resistance for a while. But the longer it stays up here the greater the likelihood that the stock will ultimately blast higher. It’s a bad sign that the stock pulls back this much after it’s debut; but it’s a good sign that the stock rallies this much after the bottom in less than 2 months.

That would be my trade on Dynatrace ( NYSE: DT ). And guess what? Earnings aren’t an issue, they’re out of the way and so that’s a big unknown. You are buying the stock here, stop down there, that’s the end of the story.

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