Beyond Meat Inc (BYND) is a strong momentum play, to say the least. A large base of investors in the name is young and generally new to the markets. Not a surprise since these investors also love Bitcoin. Well BYND made a ‘Bitcoin-type’ move and currently at levels not really palatable for investors. A completely different story for traders. I saw a great opportunity to find a value buy with a proper risk-to-reward. As with any trade signal, you must accept the risk to consider any trade. This is how you can plan in accordance with the volatility in the stock, and to also gauge if the reward is worth the risk involved. Sometimes we may really like a name, but the risk is much too wide to consider. For quite some time, this has been the case with BYND until two days ago. That is when I saw a great opportunity, with a strong risk to reward in place. That doesn’t always mean you should immediately jump into a trade, but it has been clear BYND was ready to move higher.
I drew a trendline highlighted in red on the chart. As BYND touched on this particular price range, we saw a positive reaction and buyers moving in. Since a lot of younger traders are also chart pattern specialist, this started to fit the profile of buyers jumping in. With the small bump in stock price, it set up a swing breakout signal we actively use in the Momo Stocks Room. We sure didn’t hesitate to take it and here we are in BYND as the stock is rising. I hope we can max out the reward side of the signal, but we have taken a small reward for timing the opportunity properly. With patience and proper execution, we have a very solid signal at the moment. Watch BYND in the near term. I expect a potential test of the $170 price sooner than later.
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