Simple Trading Stalk Candidate: DIOD 12 February 2014

simple trading

DIOD is the last of our little Stalker Buffett for today.

It too is positively structured on the higher timeframes and exploded higher today.  What’s good about this setup is the constriction of the EMAs.  Usually, when price stays in a tight enough range for long enough to cause the EMAs to do this, price ultimately explodes out of this congestion in one direction or the other… The price already exploded out of the range today and is likely to continue higher.

We suggest looking to lower timeframes for buy setups and triggers.  We will remain bullish DIOD unless/until price breaks the recent swing low at $21.46.

Remember, there is no guarantee that this (or any) trade idea will work.  Stalk candidates are positively structured and set to move higher, but anything can always and will often happen in the markets.  So the most important tools in your arsenal are stop loss orders… Use them.