We recently locked in a cool gain of +24% with a 2-day swing trade in Crispr Therapeutics ($CRSP). Continue reading this educational trade walk-through to find out exactly how we did it!
One of our favorite scans in TC2000 looks for stocks with explosive price gains of 20% or more, over a five-day period, accompanied by greater than average volume.
Volume surges are the classic footprint of mutual funds, hedge funds, and other institutions and indicate institutional accumulation.
As such, volume is one of the best and most reliable technical indicators–the bigger the volume surge, the better.
Many stocks that have already broken out on massive volume are too extended to purchase without some price consolidation.
However, high volume breakouts tell us a stock should be “in play” after a short-term pause or pullback.
With a little patience to wait for a low-risk entry point, traders can score huge gains on the next wave up in breakout stocks.
That’s how we recently locked in a +24% gain on a 2-day swing trade in Crispr Therapeutics ($CRSP), which is clearly detailed below.
The Low-Risk Buy Setup
$CRSP first caught our attention while screening stocks with TC2000 in late October.
The daily chart of $CRSP below shows the swing trade setup prior to the buy entry in our nightly newsletter:
The massive, high-volume thrust off the lows put the price of $CRSP back above all major moving averages and intermediate-term downtrend line.
After chopping around on declining volume for a few days, a tight trading range with inside days developed on November 7 and 11.
Notice how the price also remained above the rising 10-day moving average (teal line)–an excellent confirmation of short-term strength.
In The Wagner Daily, our nightly swing trading report, we set a buy stop order above the November 8 high as the entry trigger.
The First Buy Entry – Ahead Of The Crowd
The $CRSP setup triggered the buy entry in our model portfolio the next day (November 12). Check it out below:
Once again, note the clear volume surge to nearly 300% greater than average on the day of buy entry.
Two days of lower-volume consolidation immediately followed, prompting us to add shares to the winning position above the three-day high.
The Second Entry – Add To The Winning Trade
The next chart shows the subsequent price action after adding shares to our original position on November 15:
As shown above, Crispr Therapeutics rocketed up to 25% higher intraday on November 19.
Humongous turnover that was roughly 10 times greater than average confirmed the rally–again, volume doesn’t lie!
That day, we sent an Intraday Trade Alert to members that we were selling the added shares we bought on November 15.
The decisive move to quickly sell into strength and lock in profits on our partial position enabled subscribers to lock in a gigantic gain of +24% over a 2-day holding period!
However, we still continue to hold the shares from our original November 12 buy entry. That position is currently showing a handsome unrealized gain of approx. +30%.
From here, we will continue to monitor price and volume action of $CRSP to maximize the existing gains for subscribers.
The “20% rally over five sessions” is just one of several stock scans we run every night to identify low-risk entry points for swing and position trades in The Wagner Daily newsletter.
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