February 19th 2007
Swing Trade - Long EBAY 33.80 Stop: 32.68 Target: 40+
EBAY caught my eye because it too is also forming an ascending triangle.
EBAY only has a billion shares in its float. Again, way more than I typically look for, but I like the gap up and then the ascending triangle also looks good. If the NASDAQ breaks through 2500, I think EBAY and CTSH will position me well for the up move.
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3 Comments »
thierry on 22 Feb 2007 at 7:13 pm #
hello jonathan
i understand that the float is the share of the stock that are not owned …but i have a hard time to understand how this affect the move of the stock ….when you have time can you try to explain ….
for me i understand that there is people that own a stock and want to sell , that there is people that whant to buy and in the middle there is a guy who matches the sell and buy and use his own stock from time to time ….but i do not fit the float in this …..
also , why do you ignore the resistance in ebay the one around november 20 th …???
have a good day
thank you for your time , your explanations at least you teach someone to fish …..
jonnels on 22 Feb 2007 at 8:32 pm #
Good questions Thierry. First about float. A stock’s float is significant because it magnifies the speed of a stock’s move. It’s a question of scarcity. If a stock becomes desirable where investors and institutions want to buy it, the less shares there are for everyone to buy. The more they will pay for the shares that are available. You need a balance though, if you trade stocks that don’t have enough float(thin), you stand the risk of being caught in a price move where you are not able to get out at a decent price. Confused?
jonnels on 22 Feb 2007 at 8:40 pm #
Regarding Ebay’s resistance at 34.00. Take a look at a daily or weekly chart of ebay. In May, November, and now February the stock has tried to break 34.00. This will be the third attempt. I have found the third attempt to be the move where the breakout usually occurs. I guess we’ll see.