Today's somewhat down markets took a lot of the stocks I have on a bigger watchlist down. Most notably was MGI's few percentage drop. I was actually hoping it would slide down a little slower so that some funds would free up. However, today it sunk a little below the $3.30 horizontal support but not quite touching the ascending trendline. I think this is a perfect entry right here and if I didn't have $10k already in these types of plays, I'd probably add this to my holdings. Best case scenario is this hangs out at $3.30 area until it meets the ascending trendline and by then one of the others have hit their target price and I've sold. If not, I probably will just go ahead and purchase anyhow.
The thought process on this one is the long term resistance at $3.30 was broken about a month ago and its now coming back to test that as support. In addition, there is an ascending trendline forming that just happens to be meeting in this general area. Today it was at about $3.23 and a close below that plus the $3.30 would be the stop loss. The high from the last peak is in the $4.00 range, but looking at the opens/closes on the daily chart, the $3.80 area is probably an okay target. So, we have a downside stop loss at about 2.5% and upside closer towards 15%, giving this an apparent 6:1 risk to reward ratio. This seems like a strong play right here. I am waiting as of right now, but will likely miss this one.
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