Assessing Risk on an Intraday Trade
Usually you wouldn't think of a clothing retailer as a volatility play, but one look at Liz Claiborne's (LIZ) chart will force you to reassess that notion. It has pulled off a double in a month. Not bad for a sleepy little retailer. Each day it trades in a $0.30-to-$0.50 range, which for an $8 stock represents a good 3% to 5% move each day.
It would have been nice to know in advance that this stock would double so you could buy in front of that event, but more than likely, the majority of those who owned it did so from even higher prices, so they are likely just thanking their lucky stars that it's finally coming back. Realistically, you simply can't know these things unless you see some volume and price buildup just prior to a stock-moving announcement....523 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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