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Wow, another wild week in the markets!

The good news is that it seems the opportunity might not be going away.

One thing has become clear to me: in this current market environment, it is so important to be selective about the stocks and setups I am going to trade. 

There might be many stocks moving daily, but that doesn’t mean that there are trade opportunities in all of them.

It’s important that I pick my spots well, and when I am right, I continue to hold for my targets. On the flip side, when I am wrong, I get out and move on!

As I have said before, it’s essential to prioritize your capital and your mental capital. 

 

Let me show you an example of how I prioritize my focus and plan for a possible trade.

One stock that I spoke to my members about yesterday is ILUS.

 

Ilustrato Pictures International (ILUS)

The stock has had my attention for a couple of days as it has formed a bullish flag pattern.

However, volume increased significantly in the stock yesterday, and it attempted to break over that critical level around $0.48.

The stock closed up 11.23%.

First things first, what is ILUS?

ILUS, according to octmarkets.com, is a public M&A investment company operating out of New York, London and Dubai focused on adding shareholder value by innovation and growth. The company is primarily focused on acquiring businesses in the Technology, Engineering & Manufacturing space globally.

 

Market Cap: 575M

Outstanding Shares: 1.2B

Float: 342M

 

As I said above, it is crucial to be selective and precise. Sure, I like the setup, but I am not long in the stock yet because I need to get further confirmation that the breakout is on.

All I can do is plan the trade and trade the plan if it materializes.

At the time of writing this, the stock is experiencing an inside day. By that, I mean that the stock is trading inside yesterday’s range.

In the future, the plan might change as the stock establishes new levels of support and resistance. However, I am keeping a close eye on the $0.48 area and yesterday’s high of $0.4925 as resistance levels.

If the stock can break above resistance and hold above, it might present a solid long opportunity for me.

 

I would not want to see the stock break below the previous day’s low and hold below.

As long as the stock continues to form this bullish setup and hold above prior resistance levels, I will keep it on my radar for a potential breakout to the upside.

Author:
Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

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