Looking for a bit of sun on a stormy day? Check out Solar Edge ($SEDG) (December 02, 2019)


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I want to look at SolarEdge ( NASDAQ: SEDG ) here. I’ve got this box that I drew here a while ago, just kind of looking at where this stock seems to be trading, which is below the 50-day moving average, right here, in this range here. The stock is in about a 10 percent range, which is what a lot of channeling stocks tend to do. They kind of tend to be in about 10 percent ranges. Of course, once they break out of that range then they tend to run about 20 percent; this is standard stuff.

So what are we going to do with SolarEdge ( NASDAQ: SEDG )? I wouldn’t be selling it here even though it is up at the top of this range. The reason I wouldn’t be selling it here is because this stock was in this basing pattern; higher lows, a flat top here, and then a breakout. It looked like all systems go. Over $100.00, keep ongoing, it didn’t do that.

We had a bullish pattern here and then that broke down but the stock didn’t keep falling. And the longer a stock that is broken like this, the longer it trades sideways, frankly, the more bullish I become; because it is just hovering right here underneath the ceiling, the 50-day moving average, if it is just hovering right underneath the ceiling and everybody gets lulled to sleep here you are going to see people shorting this stock.

Everybody gets complacent and thinks the stock is going to fall. If it breaks out above here that’s a real blastoff and you can see the stock then run higher and then in a month or two, of course, traders are going to look back at this, they’re not going to see this, they’re not going to see this triangle, they are just going to see a stock that was in one big long trading range that ultimately broke out.

I would say watch this stock. If it runs up above the 50-day moving average and holds I think you could take a position. I think you could start a position in the stock and then keep a stop just a little bit underneath, maybe a real tight one. That’s how I would trade SolarEdge ( NASDAQ: SEDG ); that’s how I am going to trade SolarEdge ( NASDAQ: SEDG ). I don’t have a position here but if it starts breaking out above the 50-day moving average then I will go ahead and take a position.

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