Monday, December 13, 2010

Volatility Squeeze Candidate: PDO

Wandering around in the charts, I found this set up on PDO.  First a chart (click to enlarge), then some bullet points:

What I like about the chart:
  • volatility is very, very narrow. The stock is gearing up to make a move
  • ULT is moving up; that suggests to me that the move will be up.
  • Significant volume @ price bar where price has been accumulating.
  • Some constructive volume over time.
What I don't like about the chart:
  • Very, very thin volume.  However, that can be a boon for this type of set up.  Volume will need to come in to make this stock move.
  • Bad news could make this stock fall out of bed.
What I like about the financial profile(1):

  • Very strong balance sheet
  • Profitable, but goosed with gain from an asset sale.

(1) I don't do in depth financial reviews; very cursory.  This trade is primarily a speculative technical trade.

Position:  I entered a long position @ 4.72 today.