Sunday, June 13, 2010

Speculative trade...

I have been watching this stock, a speculative stock if you will, from the powerful Video Stores industry for almost two months now. I never added it to my official watchlist as I consider it some what of a risky stock compared to the likes of NFLX and CSTR in the group because unlike HAST these stocks have outstanding fundamentals and are widely held by big institutions.

HAST has formed a somewhat odd shaped cup and handle pattern with very tight trading in the handle on low volume. The top of the handle has clearly defined resistance at the $8.00 marked which has been tested and rejected at least five times in the past four weeks. Should HAST break past $8.00 I believe that it will make a substantial short term move at least to its 52-week high of $9.38.

So with a sensible stop loss this stock offers high probability (on account of it sector strenght and the huge odds of a market bounce) for outsized gains in the near future.

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