Long
DLIA Short Squeeze - 7.5:1 Reward/Risk
Stock has been beaten down and continued to fall since the gap on 9/17. Short term pop is very likely which would create high short term volatility for both longs and shorts. The technical properties are as follows:
1.) Low float - DLIA has 66MM total shares outstanding
2.) High short - Over 13MM shares sold short as of 11/14, this represents over 21% of DLIAs total float.
3.) Volume - Average daily volume has been increasing and price action is trending upward.
4.) Days to cover - is currently 8 days at current average volume levels. On heavy volume days to cover would still be approximately 4 days.
5.) Price is holding above the 13EMA, 21MA and holding at previous resistance of .13
6.) Possible ascending triangle has formed 11/10 - 11/26
Current price target for the squeeze is a pop to .28. Given the high short interest price may potentially fill the 9/17 gap as highlighted in the chart. Given these factors both sides of the trade should use caution when entering this trade. Entering on a sold solid close above the .13 mark with a stop loss around .11 would give a reward/risk ratio of 7.5:1 or more.
Looking for more trade ideas? Follow my weekly watch list for more breakouts and breakdowns at Looking for more trade ideas? Follow my weekly watch list for more breakouts and breakdowns at thebreakouttrader.com/
1.) Low float - DLIA has 66MM total shares outstanding
2.) High short - Over 13MM shares sold short as of 11/14, this represents over 21% of DLIAs total float.
3.) Volume - Average daily volume has been increasing and price action is trending upward.
4.) Days to cover - is currently 8 days at current average volume levels. On heavy volume days to cover would still be approximately 4 days.
5.) Price is holding above the 13EMA, 21MA and holding at previous resistance of .13
6.) Possible ascending triangle has formed 11/10 - 11/26
Current price target for the squeeze is a pop to .28. Given the high short interest price may potentially fill the 9/17 gap as highlighted in the chart. Given these factors both sides of the trade should use caution when entering this trade. Entering on a sold solid close above the .13 mark with a stop loss around .11 would give a reward/risk ratio of 7.5:1 or more.
Looking for more trade ideas? Follow my weekly watch list for more breakouts and breakdowns at Looking for more trade ideas? Follow my weekly watch list for more breakouts and breakdowns at thebreakouttrader.com/
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