Sprint Corp (NYSE:S) is on fire. Bears are being roasted and toasted, resistance levels are being torched. And if recent price action is any indication, it looks like another surge is looming.
Let’s chronicle the recent Sprint stock blaze and provide commentary for what to expect and how to profit going forward.
The turn in S stock began in earnest with a rousing breakout in June. The breach of $4 was the tell.
Bears fled while bulls fed (on gargantuan gains). And then earnings threw gasoline on the fire. The post-earnings run last month was glorious. In two days Sprint stock notched a 36% gain.
You would think after such a rise, profit takers would swoop in and take prices down a few notches. But NO! Sprint has absorbed any and all selling over the past two weeks like a dry sponge. The post-earnings consolidation has taken on the form of a high base that is breaking topside as I type.
If you’ve been waiting for a lower-risk entry in S stock, this is it. The bullish price action has been accompanied, indeed confirmed, by volume patterns. The earnings moonshot transpired on epic volume showing everyone and their mother piling into the stock. Better yet, the past two weeks of chop have seen little to no volume, showing a lack of any aggressive profit-taking.
Sprint shareholders want more and they’re not parting with their beloved shares just yet.
The Sprint Stock Trade
Stock traders can grab shares of S stock with a stop below the nearest pivot low ($5.85). The price of S is so cheap it effectively is a call option so I see little need to venture into the derivatives market on this one.
But if you must, try the Sep $5 calls for about $1.40. The risk is limited to the initial $1.40 debit while the reward is unlimited.
At the time of this writing Tyler Craig had no positions in any of the aforementioned securities.
