INKAT stock’s daily chart certainly looks scary. During the last two months the stock price is trending downwards but yesterday a quite significant green candlestick was formed. Normally that would not be a buy signal, but upon taking a look at the weekly stock chart of INKAT, the candlestick formation does look very promising. Combining it with the major reversal signs in the hourly chart, I believe there is money to be made the following days trading this Greek stock.
I’m not going to talk about the reversal signs and the continuation patterns found in these stock charts. This time I’m discussing where we should set a stop loss and a target profit if we want to make money out of this stock. The Greek stock market act in an unusual behavior from time to time and we should take precautions. My general investment advice regarding investing in Greek stocks is to use the daily or the 30-min stock charts to define the stop loss orders, while keeping an eye at the daily chart to find the take profit target.
According to the daily chart of the INKAT stock, our best stop loss should be set right below 0.75 which was the previous lowest low. Although the stock price can fall back to the weekly moving average at 0.63, I don’t want to be exposed to great risks and maintain an open position for a long time. Besides, if the stock breaks below 0.75, the downtrend apparent at the daily chart will continue and we’d better not be long then!
Setting a target profit at 1.05 seems reasonable as the latest support level of the downtrend is right there. However a confirmation at the hourly chart should be also present in order to close the position, as the stock price can easily reach out for 1.50 which is the upper Bollinger Band at the weekly stock chart. Of course we should not expect that kind of profit, as such price movements are quite rare and even the most disciplined trader would have trouble maintaining his position for many weeks, if he is interested in swing trading. Obviously, if you regard yourself a long-term investor, INKAT stock provides an opportunity with great potential in the long run.
On the other hand, if you are like me, you should target for smaller profits that come much more often though. Accumulating all that small profits, we may end up more profitable than the long term investor!