VERI - Buy What's Going Up

$VERI has been a runner over the past few weeks. The question now is, should we short it?

As trend traders, the last thing we want to do to $VERI is to short it. It’s nice to paint tops and have our little egos stroked when this thing comes crashing down fast, but trend traders follow the price movement, not predict it.

Here’s the chart on the daily:

VERI Daily - 2017-09-27

Today, we have a massive red candle engulfing the prior three trading sessions. As far as we’re concerned, the overall trend on the daily chart is going up. Ignoring everything else like news, PE ratios, or whatever fundamental analysis, this chart is a screaming long. As Paul Tudor Jones once said:

“…at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE’s? If it’s going up you’re supposed to be long it.”

Put another way, your goal is to jump in on the trend, up or down, depending on your timeframe. How much risk you’re willing to put on this trend trade depends on where you place your stop. Conservative trend traders would place a stop below the existing 50MA, and more aggressive trend traders would place it at a closer MA (20MA).