NEW YORK (TheStreet) -- Good morning traders!
The market can't decide whether it wants to go up or down. Every time we get to potential breakout levels, be it up or down, the breakout never happens. The S&P 500 (SPY) and the Dow (DIA) were at breakout levels last week, but the resistance was too strong and the indices traded lower. In a choppy market like this, we need to watch our positions closely, and be ready for anything.
According to the Stock Traders Almanac, May 5, 6 and 7 are historically bearish days -- more than 60% of the time -- since January 1992. So keep that in mind.
1. First, let's look at Globalstar. The company provides mobile voice and data communications services through satellite worldwide. The company offers duplex two-way voice and data products, including mobile voice and data satellite communications services and equipment for remote business continuity, recreational, emergency response, and other applications. It also offers fixed voice and data satellite communications services and equipment for rural villages, ships, industrial and commercial sites, and residential sites. Plus the company sells satellite data modem services comprising asynchronous and packet data services.
Globalstar traded positive on Friday, with a big close: up 5.60% to $2.83 per share.
- Friday's range: 2.68 - 2.85
- 52-week range: 2.33 - 2.85
- Friday's volume: 4,364,324
- 3-month average volume: 1,831,020
Globalstar looks good from a technical standpoint, as it has been in an uptrend since September of last year. The stock's chart was trying to form the dreaded "head and shoulder" chart pattern over the last month and a half, but Friday's candle broke over the shoulder -- and broke that pattern. Shares traded over near term resistance, and on Friday reached a new five-year high at $2.85. Now look for shares to trade to the top of the current trend channel and continue in the same fashion it's been trading: up, up, up. Globalstar is also setting up for a J-hook, which is a very profitable chart pattern. Watch for the breakout confirmation today.
My first target would be to the top of the current channel at about $3.10, which is up 9.41% from Friday's close. Today will likely offer a cheaper entry. I'd like an entry at $2.70 to $2.80. I'd set a stop at $2.55, as I wouldn't want it to trade below this level. Stay long until you see a confirmed sell signal or a confirmed close below the t-line (8 exponential moving average, or 8 EMA). Let the trade work, give it time to marinate.
GSAT is reporting earnings on Wednesday after market close, so be watchful of that. I try not to hold over earnings, but do as you feel comfortable.