EEE Follow Up

EEE is a speculative long that I brought up on June 17th and 2 more follow ups since then. I know a few of you are trading it as we have looked at it in email requests lately.

Today EEE has made a strong move that would have made the original June 17th purchase a nearly 12% gain today. However, EEE is one of the few C&D trades that looks as if it might have more in the tank. Usually any 1 or 2-day double digit gains I view as a market gift and take them or at least portions of the profits quickly, as they can disappear just as quickly. EEE is one I would consider having taken partial gains and trailing a stop behind the trade. It still may be a trade worth initiating a position in so long as you understand risk management on highly speculative positions and are comfortable with it.

 EEE's relatively flat trade lately and this morning's spike on excellent volume.

 Here's the initial trade idea on the 17th @ $1.81-also note today's daily volume is excellent. We look for a strong close near the top of the daily range and increasing volume as an indication of the probability of a follow through move over the coming days.

 This daily 3C chart is why I think EEE may be more then a 1 day pop, usually C&D trades that make 1-day or two day moves don't show positive divergences as far out as a daily chart.

 For this reason, a trailing stop makes sense. At this stop, a 50-bar average on a 5 min chart, you can still lock in a decent profit.

EEE does look like it is going in to a triangle consolidation right now, for that reason a slightly wider stop on a 10 min chart (50-bar average) also makes some sense as it should give you at least a break even trade and the chance to let EEE consolidate for possible further gains.