Here’s your trade (or non trade) on $PDFS – February 17, 2023


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I want to look at PDF Solutions ( NASDAQ: PDFS ). I noticed an article on PDF Solutions ( NASDAQ: PDFS ) in Investor’s Business Daily, at the end of the day, just a couple of hours ago, noting that they had better than expected results. And so the stock broke out and it held the breakout. So this is really important, that the stock actually held the breakout. Because recently a lot of these stocks that break out wind up not holding the breakout.

This is different, this is what I am talking about, Roku ( NASDAQ: ROKU ). They reported earnings here. A big gap-up, monster, it’s all great. Yay for Roku ( NASDAQ: ROKU ), tune in. But then the stock had kind of a crappy closing location value. Meaning, if this is the box right here, then the stock, from the high and the low, then the stock closed in the lower third of the day.

That’s a little different from this, the high was 37.66, it closed at 37.50, and it had a big old range. So this is a stock that could indeed go higher. However, I caution you against buying this stock right now. Look at what happened to Palantir ( NYSE: PLTR ). It had great earnings, the stock moves up and then bam, the stock comes back down.

Now, is this a good company? I don’t know, I seriously don’t know. But I do know this, if you had bought at the high, oh it’s a great company, you are down 10 percent. So the best time to be trading these types of stocks, if you don’t have insider information where you could buy it in advance of a big move; if you don’t have that kind of insight, then you have to wait until after the initial move is made.

So you are saying, Hey man, I really want to buy this stock. It got written up in IBD and all that. Great earnings, but don’t buy it now. There is such a thing as the Three Day Rule and it is pretty easy. It means that whenever a stock makes a big move on news, just wait 3-days before you do anything. Let it kind of calm down, let the excitement pass, and then just see where the stock goes.

If you were looking to buy a stock of a company that had really awesome news and the stock ran up a lot, if you just wait a few days, just be patient, the stock will come to you. Let the stock come to you as opposed to you going after the stock. Trust me, it will work better.

I will be watching this next week but I sure as heck won’t be buying it on Tuesday. I am just kind of curious to see if, when it does pull back, it holds this steep line. Because this is a pretty steep trend here, so we will see if it sticks within that.

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