This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bofi Charts: Long-Side Opportunity

Stocks in this article: BOFI

By L.A. Little of, author of Trade Like the Little Guy.

Most of the names we've looked at over the past few weeks have been large-cap names. But there are a host of companies that trade in the micro- to small-capitalization area of the market and these companies offer great opportunities if you recognize the risks inherent to them and take steps to protect yourself.

For example, most micro- and small-cap names have high beta values, meaning the equity price moves around a lot more than the general market. Volatility isn't a bad thing in and of itself, but it cuts both ways. Another problem with smaller companies is that they typically do not have a significant amount of institutional sponsorship nor do they trade a large number of shares on a daily basis. This leads to large bid/ask spreads.

To trade smaller stock issues that share these traits, you have to do two things. First, you have to trade smaller. If your normal trade size is 4% of your overall portfolio, then you have to cut it down to 1% or 2% when trading one of these issues.

Secondly, you have to be able to withstand large swings in price and use that as an opportunity, not a failure. To do so implies that you will scale into and out of your positions always making purchase and sells at the extremes.

So let's take a look at one of these names where opportunity is abundant on the long side of the equation. Bofi Holding (BOFI) is a consumer-focused, FDIC-insured, nationwide savings bank that primarily operates over the Internet.

Let's start with the long-term time frame at which we can see that BOFI is in a confirmed uptrend (see monthly chart above).

If there is anything to worry about in the long term, it is that the uptrend channel is rather steep, and a breakout of that channel should lead to a nice-sized correction when it finally occurs on a closing basis.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs