Small Cap Alert: LL Possible Swing Trade

Lumber Liquidators recently collapsed on a rating/outlook cut. Their market cap was 700M last week and today it is only 27.6M. There are two really solid levels to play this for a bounce.

If LL has another collapse tomorrow through the first level of $17.35, then depending on the circumstances, I may enter for a swing trade with the upside target being $19.50 and I would use confirmation below the second level of $16.56 as a stop out. If however it consolidates sideways for a few days, then I will likely enter on a pierce of $16.56 and use a close below $16 as a stop out.

Upside for the first scenario is upwards of 11% with the downside at about 4.5%. Upside for scenario two is 15.5% with a possible downside of 4%.

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About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

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