DRYS - how would you trade this?

[momothebored]

Weekly chart:
http://tinyurl.com/phng2bq

Daily chart:
http://tinyurl.com/pvzwh7m

Weekly charts are challenging a major top. If it breaks out, then i'd assume it'd head to test $6.40.

How should trade this?

(i) Should you buy as it breaks $3.84? It's actually fluctuating around that level now.

(ii) Should you buy on a pullback? There hasn't been one in a very long time.

 

[Liquid validity]

OK, just my opinion, may well turn out to be total gash.
Right now I would leave it well alone.
I'll qualify that by saying I am talking purely from the perspective of price.

Reasons:
1. Chart goes back to 2010, checked 5 yr chart as well.
Current run looks to be not far off, other recent runs.

2. Best entry for this move has been missed - 1.75/2.00 support.

3. Current price is potential Feb 2012 resistance.

4. Even if it does go higher, I would be expecting a retrace or at least
a test of 3.86 area (3.25-4.00).

Over rides:
Just one - convincing high volume break of 4.00 with a daily range of around 0.50
Long exit - 3.75/3.50.

In a nutshell, buy support, sell resistance.
All depends on whether you know more about the company - reports, accounts,
new shareholders etc.
Any recent major deals that may be causing a more long term turnaround?

Like I say, you asked for opinions, thats all this is, another worthless opinion
Truth is, I have no idea what price will do tomorrow.

 

[VielGeld]

Hmm... Best way to trade this imo, would be if it sells off a bit then consolidates around $3.5 area (or lower. That it consolidates is the key factor). Buy before it shoots up again.

I assume you're familiar with the breakout pattern? Well, I'd be looking for that around that area. Be patient, and let price consolidate. Once a bottom forms, you'll have your cue to look for an entry. If done right, your risk should be low and you'll ride it all the way up to $6+.

Of course, this is only one scenario. It may very well keep shooting up if momentum is really strong, in which case I would look for a point where resistance forms, but isn't so much that it would cause a sell-off. I think this would be a trickier trade, and I'm not sure I'd recommend it to you...

All I know here by looking at the weekly chart is that I would not buy just yet. That area is an area of resistance, so breakouts are common in this scenario (implying sell-off -> consolidation before going back up. Too much stress to hold on while price sets up, and you can get a better entry later on anyway).

But this is just me...