by Shane Ormond
On Feb 20, 2020
Shares of Groupon and Blue Apron tanked yesterday after their quarterly reports reignited skepticism about the companies’ “unconventional” business models. (And by “unconventional” I mean “doesn’t work.”)
Blue apron, groupon, e-trade, morgan Stanley
Blue apron, groupon
Yesterday, we looked at a monthly chart of ProShares UltraPro QQQ ETF, noting the stock has been on a bullish run since June 2019.
Today’s Chart of the Day is a Keltner Channel Chart for GSX Techedu Inc. (NYSE: GSX).
GSX Techedu Inc., a technology-driven education company, provides online K-12 large-class after-school tutoring services in the People’s Republic of China. It offers K-12 large-class after-school tutoring courses that cover various K-12 academic subjects, including mathematics, English, Chinese, physics, chemistry, biology, history, geography, and political science.
Now, the Keltner Channels serve as an overbought/oversold indicator. When the daily stock price is trading above the Upper Channel, it signals that the stock is overbought.
Stocks in a price uptrend do not advance in a straight line.
When a stock becomes overbought, it normally declines in price as the inevitable profit taking occurs — proving there are always price retracements along the way.
Below is a daily price chart for GSX Techedu Inc. along with the three Keltner Channels (Upper, Middle, and Lower).
A Keltner Channel “Buy Zone” occurs when a stock is trading below the Upper Keltner Channel. Once the daily price is trading below the Upper Channel, it signals a buying opportunity.
If you had purchased GSX shares when GSX entered the “Buy Zone” around November 27th, you’d be up 127.47% on the stock by now.
Knowing that GSX shares are continuing to rise, experience pullbacks, and rally again, we’ll be paying attention to future pullbacks in order to get in at the lowest entry point.
Maximizing Our Profit Potential
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
On February 4th, we highlighted Leidos Holdings, Inc. (NYSE: LDOS), noting that LDOS had been hitting a series of higher highs and higher lows.
If you happened to have purchased LDOS shares on that day, you’d already be up 4.89%.
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Editor, Chart Of The Day