snp- That may very well prove to be the case. A trade setup is only a setup until & unless triggered. I haven’t counted but I’d say there must have been dozens of trades booked for double-digit gains so far this year from stocks with very questionable/poor fundamentals such as energy stocks, which just a few months ago, all the buzz & chatter was how toxic most of those stocks were & how many were likely to file for bankruptcy protection. As an active trader, I’ll trade the charts over the fundamentals all day long. As Baron Rothschild said, “”The time to buy is when there’s blood in the streets.” and DAVE certainly looks bloody right now but again; no breakout, no trade.
I’d also add that I STRONGLY encourage anyone not comfortable with a trade for any reason to pass on it & wait for their type of setup to come along. I don’t think that my wording about this being a very aggressive, counter-trend trade in the post could have been any more clear so I’d imagine that quite a few will pass on this one as they should.

Good point. One consideration that I factored into this trade is that with the high short interest in DAVE couple with that symmetrical triangle pattern on the daily chart, the recent bullish divergences in place at the lows (also shown on the daily chart above) and the fact that DAVE is still just above key long-term support on the weekly chart, I’m figuring that we may see a fair amount of buying pressure over the next few weeks as shorts start to unwind or reduce their position to avoid getting blown out on a positive earnings report or forward guidance on May 4th.. at least that’s what I would do if sitting on a profitable short position.

Some traders avoid thinly traded stocks but they’ve never bothered me as long as the chart pattern looks nice & the R/R on the trade is attractive (amusing that the spreads aren’t excessive & the volume isn’t too low). I use limit orders vs. market orders when buying & selling thin stocks & I also use them primary for swing trading vs daytrading as the longer you hold and the higher your percentage profit gains are, the lower the impact on any spread differentials that are above 1 or 2 cents. DAVE has been trading with about 4-5 cent spread today & you can usually place your buy order a penny or two below the ask price & get filled. At the current price of about 6.00, if you lose 4 cent due to the spreads, you’re looking at a lost over just over 1/2 of 1%. That’s why I typically won’t daytrade thin stocks unless shooting for a pretty large price target. If DAVE hit that 6.34 target, a 5.25% gain, the money “lost” on the spread differential would be minimal. Plus, should DAVE break above that pattern, there’s a good chance that the volume will increase, thereby reducing the spreads.