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munsterisque
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Part Time Investor, part time researcher. Swing Trader, with some long term focus on a handful of stocks
  • Fairway Group Holdings (FWM) - Swing Trade For 43% Gain 0 comments
    Feb 18, 2014 11:25 AM | about stocks: FWM

    For those who haven't been watching this stock, FWM has crashed from a high of $28.88 (July 2014), to $7.21 today. The drop has been relentless, with nary a pause on the way down.

    With any strong downward movement, there is typically a strong bounce as well. Which is what we want to play off of in this simple Swing Trade.

    There are 2 reasonable, conservative swing trades possible here:

    1. Buy at $7.4 and sell at $10.

    Sell at $10 because that's where the stock will meet the 50sma (Simple Moving Average), and also because $10 is a big Psychological barrier for many stock traders (43% Gain).

    2. Buy at $7.4, and sell at $14, which is close to the 38% Fib Retrace of the FWM last-high ($25.72), as well as where the stock price will meet the 20sma. This trade may take a little longer to hit, but still very reasonable (100% Gain!)

    It's also possible to do a combo of the 2 plans, sell some at $10, sell the rest at $14. I would also recommend a phased buy in over a few days, to ensure you buy at bottom, or at least close to it.

    Additional Notes: As of Jan 31, 2014, 28.8% of the stock was shorted. I can see a great case to short this stock at its previous $20+ price, but at $7.5, I don't think there's a case anymore. Once this stock starts it's upward bounce, there will be a short-squeeze that will help propel FWM up.

    Disclosure: I am long FWM.

    Themes: Organic Food Stocks: FWM
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