Youv’e Got Mail – re: Buy AOL

Hopefully this did not go to your SPAM file. Remember back when the internet was new. Only the cool people had it and you spent 10 minutes dialing up to connect at a data rate of 56k? Back them AOL Inc, $AOL, was the bomb. Everyone had to scurry to get their own name as their AOL e-mail address and paid $20/month or more for internet access. They were really the Apple of internet access for you youngsters, everyone had to have it. What have they done since then? Pretty much nothing as far as I can tell. Yet it looks to be a great time to buy their stock. Let me explain.

AOL Inc, $AOL Daily

AOL Inc, $AOL is breaking out of an ascending triangle pattern of the daily chart above. It is doing so with increasing volume and bullish technicals (the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator are shown). The price objective of the pattern break is 21.40 and there is only the 200 day Simple Moving Average (SMA) in the way. That is a 30% gain from its current price. But there is more. Look at the weekly chart below. Often previous price history can create a roadblock as those that bought at a price level look to sell when it gets back to their break even. But a lack of price history can create the opposite effect rocketing a stock price higher. This is the potential in $AOL as there is virtually no trading history between the current price and 19. If that is not enough then beware that it also has over 12% short interest that could fuel a squeeze higher.

AOL Inc, $AOL Weekly

So a 30% potential gainer that may move quickly? What more do you need to know. I have no position as I write this but I am likely to be long by the time you read this.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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