Stocks Trading Idea for ASPS | Altisource Portfolio
This week, sitting at the top of the “Trend Change Lubricant” Top List from Trade Ideas technology is ASPS. With a float of only 18 million shares, 67% of that is held by short sellers. ASPS had plenty of time to recover from the steep drop in sympathy to news in another company. The chart shows an ideal setup for this type of trade; a narrow range base looking to move higher out of that base with a high short float % to help fuel the breakout.
Note- The average daily volume on ASPS is a bit low at 132k shares but if the stock breaks out, relative volume could tell the story. It would be nice to see relative volume readings above 2.0 if the trade triggers. This would mean the stock is doing double the normal volume for the day. If not, use your own discretion on volume.
ASPS Entry Strategy
The entry is conditional of a trade at 22.12 just above the recent high of this tight range. The suggested stop is any trade below 20.45. The suggested target is simply a near term high at 25.35. You can see on the chart below the graphical representation of risk and reward for this trade. As always use only the amount of shares that would equal your maximum dollar loss should ASPS trade below 20.45.
Footnote: This is a table showing the maximum profit for all past 2017 Trades of the Week. Timing the top is impossible but this table shows how much alpha was possible when considering the exit of these positions. The trades outlined in red eventually hit their suggested stop prices, so you can see the importance of timing and harvesting profits along the way when you can, especially those that move above 10%.
Targets are not absolute. Targets involve timing. Profits can and should be harvested along the way.
Risk to Reward ratio ideal is 1:3