NEW BULLISH Plays
21Vianet Group, Inc. - VNET - close: 20.48 change: +0.78
Stop Loss: 19.45
Current Gain/Loss: unopened
Entry on December -- at $--.--
Listed on December 17, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 614 thousand
New Positions: Yes, see below
Why We Like It:
VNET is in the technology sector. The company provides an Internet data center in China. The stock looks interesting as a bullish candidates because investors are buying it in spite of bad news.
The gap down in late November was a reaction to VNET's earnings. Management lowered their guidance and shares plunged. Yet traders quickly bought the dip. Now here it is three weeks later and VNET is on the verge of hitting new 52-week highs. If investors are buying bad news then the past of least resistance is definitely up.
The stock has short-term resistance near $21.00 (actually about 21.10). Tonight we are suggesting a trigger to open small bullish positions at $21.20. We do want to keep our position size small for a reason. First, VNET has obviously been very volatile over the last couple of months. That could make it tough to trade. Second, the post-IPO high from back in 2011 is $22.33 and that could be significant overhead resistance.
NOTE: I am not listing the options on VNET because the spreads are a bit too wide to trade. However, using the options could limit your risk.
Trigger @ 21.20 *small positions*
Suggested Position: buy VNET stock @ (trigger)