Good housing numbers. Look at Beazer (BZH). (June 27, 2012)
BZH
I’m Dan Fitzpatrick at StockMarketMentor.com on Wednesday, June 27th. We’re going to go back to Beazer ( $BZH Beazer Homes USA, Inc. ). The housing numbers were pretty good today and so Beazer ( $BZH Beazer Homes USA, Inc. ), which recovered yesterday, took off. It had been in this little flag pattern now it’s up. So what do you do with this trade? Okay, I think you’ve got to protect profits. That’s it, it’s pretty easy. Don’t look at this $3.08 to go up to $3.78. It might, but think about it, we’ve got a lot of headwinds ahead of us. I would take the money, not run with it, but protect it. We get a pull back here, now we’re moving to the upside. So all you want to do is look at the series of intraday lows. This was the lowest one here. Since that time, two, three, we’ve had four higher lows in a row. Stocks breaking out, no question about it. You can see the consolidation right there. But think about it for a second. If you want to stay long, you believe the stock’s going to continue to go higher. You think it’s going to come back and fall lower, then the last thing you want to do is stay long. It’s fine to say, well if it falls back here then I’ll add to the position. Dude, no you won’t. It’s $3.08 now. Are you really going to ride it all the way down to $2.35, $2.32, even $2.60? It’s $3.08. So what I would suggest doing is this. Lock in some profit. Today’s intraday low was $2.99 we’ll call it $3.00. Set a price stop at about say $2.95. That will lock in some kind of profit, hopefully anyway, but if it doesn’t that’s okay to. You want to make sure that you’re just not long, stocks that are fake outs. This could very well be a breakout you want to stay long. The only way you’ll know whether that is suspect, in other words, hey, maybe it’s not the breakout, is if the stock falls back down below today’s intraday low. Hence breaking the short pattern. So you keep a stop $2.95ish. Let the stock run and if it turns out that you’re correct, your trade makes a whole bunch of money. If it turns out that your incorrect, again that’s okay too. That’s why they call the trading and not winning. Okay, members over to the Strategy Session. I’ve got some stuff to say about tomorrow, as well as some biotech stuff. Free Chart