First BSC got a $2 bid from JPM and yet it continued to trade above that level.
Now JPM has raised its bid to $10/share and BSC is currently trading far from that level.
What is going on?
Because there are some great resources out there that can explain the details of the evolving deal far better than I, let’s focus on what it means for you as a trader. Observing the deal is one thing, but wanting in on the wild price action in the stock is a completely different matter.
You can find the complicated answer elsewhere, so I’ll give you the simple one here: if you don’t understand it, don’t hold it overnight.
The stock is ignoring any technical action on the daily chart, which is the timeframe you need to be watching if you’re swing trading . However, on an intraday chart, a pure day trader with a shortened timeframe can still find some plays in the stock. Given that the majority of news comes outside of market hours, the risk of overnight gap is omitted by day trading it. Furthermore, a day trader is simply responding to price action over the course of seconds, minutes or hours. That’s the only way to trade such a news-driven stock like BSC is right now.
If you’re a part-time trader or someone who prefers a little longer timeframe, stay away from BSC. It’s a nice side show, but it offers you far more risk than potential.
Trade well today!
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]