Twitter Ticker ($VG)

• Charles Amadeus
• August 26th, 2009

Vonage chatter is exploding on StockTwits as the VOIP provider skyrockets 165% in Tuesday’s trading. No news has been released to confirm the move, but the price speaks for itself as the market wants to get its hands on this stock.

Though VG is trading in an uptrend above a rising upper Bollinger, the chart has formed a long tail up. This signals an overextended rise and portends a bearish reversal, though it is best to wait for a secondary downtrend for confirmation. VG could go higher, but the risks are no longer favorable for a new entry. Unless there is a pullback, there is no easy method to determine position size and stop-loss.

A break below 1.42 may provide a good shorting opportunity, though given the broad market’s strength, its sorta like pissing in the wind. Best to look for other long opportunities that are less extended or wait til the market rolls over to get short this runaway. Keep in mind that just because a rally is long in the tooth doesn’t mean it can’t continue. Always wait for price to confirm the trend before initiating a trade.