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IPI Trade Entry & Setup

IPI (Intrepid Potash Inc.) offers an objective long entry here on the breakout above this primary downtrend line. Suggested stop below 1.27 & T2 (2.49) as the current final target. IPI was one of several long trade setups covered in this recent Agricultural Sector Trade Ideas video.

IPI daily Aug 30th

IPI daily Aug 30th

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Aug 30, 2016 10:12am|Categories: Completed Trades - Long|Tags: |8 Comments

8 Comments

  1. rsotc August 30, 2016 10:29 am at 10:29 am

    As IPI is a low-priced, potentially volatile stock, I meant to add the following notes to this trade idea. The ideal entry range is between 1.32 & 1.55. One might want to modified their stops depending a higher or lower entry price than the 1.49 in the original post as well as their preferred price target. Also due to the fact that the expected volatility & fact that this is a low-priced, micro-cap stock, the proper beta-adjustment to one’s position size in order to account for the above average gain & loss potential should be considered.

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    • pangblood August 30, 2016 2:08 pm at 2:08 pm

      @rsotc I’m a little concerned about the volume 4.7 mil, 9x avg volume (542k avg volume according to RBC). Which seems like a bit too much compared to your benchmark 3x avg volume breakout requirement. Im worried that all the buying volume has exhausted (buying climax?), what are your thoughts.

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      • rsotc August 30, 2016 2:34 pm at 2:34 pm

        pangblood, I agree. Although volume on IPI was tracking well above average for the first 30-minutes of trading today, it has since tapered off drastically. I expressed my concerns earlier on my comment below the RKDA trade, another related ag stock which also popped above its downtrend line today in sympathy with the POT/AGU merger buzz.

        Volume helps to validate a breakout but price comes first so for now, RKDA & IPI are active trades although I also shared my thoughts about waiting for additional price & volume confirmation on RKDA for those that didn’t take it on the post-opening pop, which was just a penny above the entry/breakout price. While I may decide to revise the stops on either IPI and/or RKDA higher if I don’t like what I see in the next day or so, you might want to use a more aggressive stop to minimize losses, should these prove to be false breakouts (which can often be followed by sharp moves back down below the breakout level).

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  2. dan123 August 30, 2016 10:38 am at 10:38 am

    Nice trade setup, thanks. POT is up big today

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  3. oxienergie August 30, 2016 10:41 am at 10:41 am

    POT is up today because they are talking with Agrium about a merger. I see potential for disappointed selling, if this doesn’t work out.

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    • rsotc August 30, 2016 10:48 am at 10:48 am

      Thx oxienergie. That is most likely the catalyst for the IPI & RKDA breakouts today.

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  4. Dazi September 1, 2016 11:28 am at 11:28 am

    I’ve stayed in IPI, now considering adding some at today’s level, since I bought at 1.51 (yikes…).
    Is there consensus on this being good idea or not.

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  5. rsotc September 1, 2016 4:00 pm at 4:00 pm

    My thoughts (via a reply to a question in the trading room) on IPI:

    I’d consider holding off from adding until & unless the stock starts to move higher (assuming it doesn’t stop out) & ideally on above average volume AND with the majority of the other fertilizers stocks also moving higher, as the ultimate success or failure of this trade most likely hinges on what the sector does. Also note that many seasoned traders will never average down on a position solely to reduce their cost basis, rather they often prefer to add to the position at higher prices, as that confirms their analysis was likely correct as the trade is playing out. Here’s the updated chart:

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