In our nightly report, The Wagner Daily, we are long Sunrun ($RUN) from a $16.89 entry on June 11. Below is a quick analysis of why we are long and what we are looking for in terms of trade expectations.
A failed a breakout attempt above prior highs in late April led to a near 20% correction off the highs in May. From April 30 to May 31, $RUN dipped below the 50-day moving average intraday more than 10 times but always managed to bounce back. In early June, the price began to tighten up while holding above the 50-day MA at (b), which is generally a bullish sign. On June 7, the price cleared resistance at $16.25 and held. Although the close on June 7 wasn’t ideal, the price held above resistance and pushed higher on June 10. We entered on June 1, with a stop below the 50-day moving average minus some wiggle room.
$RUN still has some work to do to in the short term as it needs to punch through $17 on volume.
If $RUN can clear $17 on volume, then it could have a decent shot of becoming an explosive mover over a short period of time. What makes us believe that $RUN could become a significant winner?
Many traders stick to daily charts with 6-12 months of price action for analysis, but long term monthly charts work best for locating setups with explosive potential. On the monthly chart below, $RUN has been trading in a tight range for 3-4 months just below the all-time high. However, the price first broke out to new all-time highs in July of last year before stalling, so $RUN has been in base mode for 11 months, building up a ton of energy to fuel the next breakout.
A breakout to new highs could lead to strong gains of +40% or more in 3 to 8 weeks if market conditions remain stable. Like anything else in trading, there is no guarantee that $RUN will run will explode higher, but by focusing on as many multi-frame setups as possible we increase the odds of catching a big winner.
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