$SIG has a perfect valuation score. And this undervalued stock is starting to have earnings growth.
1) Its industry is getting stronger.

2) Undervalued stock with (3) a short squeeze potential.

4) SIG had positive earnings growth in the last quarter.

5) A series of bullish Pressures made the bottom in the weekly and since then it is going up.

6) This week's candle Backdrop is bullish.

7) Daily may give a GWF trend-following long trade setup by today's close.

8) Relative Performance is very bullish.

It also pays a dividend yield of more than 7%.

I don't follow analysts to decide my trade. But they still are helpful sometimes. Like it was in this case.

1) I share the post at ~1:40 PM EST on 30th Dec 2019. That time the weekly-daily was giving a GWF Long (trend-following long) signal.

My timezone is not entirely convenient to stay awake until the USA market closes. On some days I buy the stock without waiting for the market close. I assure you that it is NOT the right way. One may wait for confirmation at/near market closing before buying.

And if I followed that sensible approach, I would not buy on 30th Dec as the checklist conditions for GWF long setup was not fully satisfied (namely, the candle did not close with a bullish shape). But I was already in the stock because I slept early that day.

2) The next day price did not move much and

3) On 2nd Jan 2020, the stock dropped heavily (at one time down by more than 15%). Why? Wells Fargo analyst downgraded it with a price target of 12 (if I remember correctly!).  Twelve! That was way lower than the price when I thought that buying the stock was not a bad idea.

However much confidence I have on analysts, I seem not to be able to make money following them. So I did not think of closing my position. Instead, looking at price hitting the yellow Direction line, I shorted some more puts with 17th Jan expiry 18.5 strike (the volatility was very high and selling put made sense if I was happy to buy the stock anyway). And because I already took a position earlier, I also simultaneously place a profit booking order on the put at 50% of max profit.

4) Today I heard a ring on the brokerage platform on my computer. And saw that the profit booking order was filled. I shorted it at 1.4. And booked profit by buying back with GTC order at 0.7.

I am now left with the original bullish position. And am happy to continue to hold it. Of course, I would be happier if the stock went up in a straight line immediately after I bought it. That does not happen frequently to my trades nowadays. In fact, not in the past too 🙁 I am comfortable with the fact that sometimes after I buy a stock, it will fall. And sometimes it will fall hard. Other times it will go up or go up fast. Trading is like that. I have accepted it a long time ago.

In the end, I thanked the analyst in my mind to enable me to make some money following his downgrade by buying the stock. I don't follow analysts to decide my trade. But they still are helpful sometimes. Like it was in this case.

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Time to book some profit in $SIG.

SIG opened with a massive 30+% gap up and you could book (at least partial) profit.

I shared the long idea on 30th Dec 2019.

Thank you Wells Fargo (or not depending on whether you followed their analyst or followed my forum post !).

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Here is some additional note on how I traded $SIG.

I opened the synthetic stock long position for a credit of 0.20. Today, as of ~9:45 AM EST, the same position can be sold for 6.65 credit (mid-price).

1) When I shared my initial analysis on 30th Dec 2019, the price was near (just below) 22.  I took a bullish position with synthetic stock. Short 22 Put and Long 22 Call. I took longer-term expiry in this case, hoping to ride an up move longer if that came. 

2) I shorted some more puts when Wells Fargo downgraded it with a ridiculous (in my view) price target of 12. I booked full profit on that at 50% of max profit shortly after that.

3) Today, as price gapped up, the short put lost significant value.

Volatility is high, and thus one may book some profit on the short-put leg or wait till the volatility crash that is expected to happen once (if) price stabilizes today (or does not fall back again today.

If one traded with stock, it is time to book some profit or put a trailing stop below today's low.

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Disclaimer: This site is for educational purposes only, explaining the use of CUE systems and techniques. It is not for trade advice. Trading involves risk. You and only you are solely responsible for the outcome of your trades.

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