Nearest Resistance: N/A
Nearest Support: $82.50
Catalyst: Q1 Earnings
Shares of computer storage stock SanDisk (SNDK - Get Report) are up more than 10% this afternoon, following big earnings surprise for the first quarter. SNDK brought in $1.44 per share in the last three months, beating analysts' $1.25 target. More significant, from here, shares are still bouncing higher in a well-formed uptrending channel, making SNDK a textbook "buy the dips" opportunity. The optimal time to build a position comes on this stock's next successful test of trend line support.
The earnings beat is pressing SNDK against new highs this afternoon, an important bullish signal from Mr. Market. Those highs are significant from an investor psychology standpoint because they mean that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.If you decide to be a buyer here, it makes sense to keep a tight protective stop in place.