Sample Stock Setup

Symbol: ELLI

Profile: Ellie Mae (ELLLI) provides on-demand services and solutions to originate and fund mortgages for the residential mortgage industry in the US.

Country: USA

Market Capitalization: 2 Billion (Mid-cap)

Sector/Industry: Technology/Application Software

Technicals: This is a 50/50 Strategy Low Riser. The 50 EMA is just beginning to turn up. Normally, we like to see about 12 closes above the 50 EMA before buying, but it can be entered earlier if it establishes support at the 10 and 50 EMAs.

Note that the 10 SMA has crossed above the 50 EMA. Price formed a pivot low at the 10 SMA on Friday, and the stock rose +2.51% on above average volume. That is enough evidence to enter now. Also, note how price established support just below the 50 EMA (yellow highlight) over a period of month.

This is constructive price action. ELLI's old high is $82. A return to that level would complete a weekly "cup" consolidation pattern.

Earnings come out on 11 February (2 weeks), so a 1/2 lot is advisable, and the stock needs to show progress (profit cushion) in the next two weeks to hold into earnings.

Fundamentals: Recent quarterly earnings (YOY) grew +24% while quarterly sales (yoy) grew +61%. r

Next Earnings: 11 Feb 2016

Timeframe/Setup: Daily 50/50 Low Riser

Entry Type: New High (after pivot at 10 SMA)

Trigger Price: $69.83

Stop Loss: $64.24

1st Target: $77.50

2nd Target: $87.25

Important Disclaimer:

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