While HOLLY’s timing may not have been perfect on all of her entry signals (depending on how tight your timeframe perspective is), there is no doubt her seven signals since October have an edge in GDS which has been in a very strong uptrend since June.
GDS has spent the last six weeks digesting the 4-fold run that began last summer, and volume has remained relatively elevated throughout the consolidation suggesting profit takers and dip buyers have been battling for control — which the buyers are starting to win.
However, this is a bit of an unusual situation in that this name has earnings before the bell tomorrow. So in this instance, instead of looking to blindly enter on the opening print tomorrow, we are going to add a caveat: We will not be opening a position at any price higher than today’s close. We do not want to be chasing into any kind of monster higher gap open. We will only add this stock if/when GDS trades at or below today’s closing print of $28.75. So, for example, if GDS opens at $35, we won’t buy until its fills the gap and comes back to $28.75. On the flip side, if the stock gaps lower at the open, we’ll thank our good fortune and purchase a continually consolidating momentum stock at the opening discount price.
— Sean McLaughlin 📈 (@chicagosean) March 12, 2018
If we do enter tomorrow, we’ll trail our position with a 20% stop-loss. To capture big wins, we gotta give these monsters room to breath.
HOLLY Hot List Portfolio Update
It’s been a few good days since our last update middle of last week, driven by gains in MRTX and MZOR. And we’ve been able to raise our stops in a handful of names as well. We like that.