Trade Setups...

When I am looking for trading ideas, sometimes I look at the list of stocks that are making 52 weeks lows.  If they are oversold and at a meaningful support level, then I watch them for a potential long trade when they break their downtrends.  Here is a look at three stocks that were on the list yesterday.  Two I would stay away from, but there is one that I am watching.

 

Achieve Life Sciences - ACHV - I don't know what is going on with this one but I would stay far away from it.  In 1997 it was trading for $88,000 a share (yes...that's eighty-eight THOUSAND) and today it is trading around $8.20.

 

 

Evelo Biosciences - EVLO - Need to stay away from this one as well.  This one just went public.  You can see on the chart that there must have been a buyer who was 'standing still' or 'making a stand' (that's trader talk) at the $16 level.  In other words, they could have lowered their limit and bought it at a better price but they wanted to prop it up artifically.  It was probably the Broker that did the IPO.  They do that to keep the Investment Banking team and their clients happy.

 

First Trust Brazil Alphaex Fund - FBZ -  There could be a possible trade setup here.  It is oversold after falling by more than -20% in just a few weeks.  It is trading around the $12.50 level.  This is where is found a bottom in late 2017.  The key to being successful in a long trade here is to wait until the downtrend is broken.  Don't try to catch the bottom!  Wait until it is on its way up before entering the trade!  The risk-reward dynamics will be much better than if you try to catch a falling knife.