5% move today. Is it time to short the monster? (September 13, 2012)
MNST
I’m Dan Fitzpatrick at StockMarketMentor.com on Fed Thursday, that’s September 13th. On this Free Chart I just want to go over Monster ( $MNST Monster Beverage Corp ) again, I’ve mentioned this before and I’ve talked about it in a few different venues, our Q&A, our members only Q&A the other night, and I think also in this column too, in the Free Chart stuff. Here’s the deal, Monster’s ( $MNST Monster Beverage Corp ) up over five percent today and that’s a good thing. Do you know why? Because I think it’s setting up for another short. Let’s look at the weekly chart and you can see; Dude this puppy is just getting going, I mean the party’s over, turn out the lights the party’s over. There are more calls for regulating this stuff; you’ve got a couple of senators that were calling for that yesterday and that was the big dump here. Now I want you to think about it, Uncle Ben, you know sprinkling more money. In fact the funny thing is, you know that old definition of insanity of Einstein where you do the same thing again and again and expect different results? That’s kind of what the Fed’s doing. I know some of you guys are big fans of the Bernanke, I’m not, I think he’s very calm and you just like, oh my gosh he’s so calm and confident that you just know that that guy knows exactly what he’s doing. Thank the good Lord that we’ve got such a steady hand at the helm here as we go through these rough seas. I of course see it a little bit different, I think there’s a little bit of the emperor has no clothes going on there, but he is quite eloquent and he has a really nice beard. And I thought Paul Giamatti did a really good job of playing him in the “Too Big to Fail”, video, or series, show, whatever; anyway I’m editorializing because that’s what I do; but let’s get back on track. All this stuff about the Fed, and all the wonderful money, and the quantitative easing, and the bond buying, and the expansion of their books, and this and that from trillions to Bernankeillions. None of that matters to Monster Beverage ( $MNST Monster Beverage Corp ) because of the threat of regulation over the energy drink industry, which by the way I kind of don’t think is a bad idea because I think there’s a lot of stuff in there that really goofs people up. So we’ve looked at the weekly chart, we see what’s happening here, I want to short this puppy again, but the problem is it is jiggy, zip, zip, zip, zip so it’s really hard to hold a short for a very long period of time. So what we have to do is we just have to draw lines, it’s not any more difficult than that. This was the first line, now we’ve got an even steeper line, so it’s picking up steam, but it makes it increasingly problematic to short as it picks up steam, because if you’re shorting now, you’re by definition late, and so the only thing a lot of times you’re going to get yourself geared up for is a short covering rally that’s going to squeeze you and you’re really going to get clipped big time, so let’s not do that. Look, this is a well-defined resistance line, this is another one and that’s fine. So we’ll cut what, a few more bucks up to $56.00. You want to short this? Maybe but we’ve also got this resistance line up here and frankly I doubt that Monster’s ( $MNST Monster Beverage Corp ) going to get up to $60.00, I don’t see it. If it got up here, yippee ki yay I would want to do that so if Monster ( $MNST Monster Beverage Corp ) gets close like $56.00 maybe $57.00, and this is important listen to me, and falters, in other words it starts to roll over, that’s when you go ahead and short the stock and get ready for the next move lower. Don’t just short it because the stock’s come up because you know what? Maybe it’s going to get bought by somebody, I don’t know, but I just know that when you see the perfect obvious short generally there’s nothing perfect about it, it’s just obvious and you’re going to get killed; so wait for this short, wait for it to come at the right time and also keep something else in mind, and members I’m going over about twenty of these names in tonight’s Strategy Session; the market is in bull mode right now because the Fed has basically said, “We’re just going to keep dumping money here until we don’t need to anymore”, and of course the sad thing is if it wasn’t so sad and tragic it would be funny, they’re assuming they’re doing the right thing. Let’s take consideration of the fact that maybe they’re not doing the right thing, they wouldn’t know that because they’re the masters of the universe; but if they’re not doing the right thing, but in fact doing the wrong thing, then what they’ve just told us is they’re going to continue to do the wrong thing for beyond the foreseeable future and that’s going to be bad on a lot of fronts. However, and this is a big, massive however, It’s really, really good for equities, because when money is super, super, super cheap and there’s a lot of it then you’re going to get equities moving higher simply because bond yields are so low that money managers have to invest in equities. And then there are some other considerations as far as the businesses actually making money, free money is good, it’s just not so much for your grandparents whose bond fund and their retirement isn’t doing to well. I’ve gone on long enough. The bottom line is be patient, wait for this stock to roll over from a higher level and that’s when you want to short Monster ( $MNST Monster Beverage Corp ). Also in about another week or so, less than a week actually, probably about four days, you’re going to see the 50 day moving average cross the 200 day moving average then somebody will be talking about that. Members get to the Strategy Session. Oh, one last thing, if you haven’t signed up for the email list for Option Market Mentor, and that’s different than the Free Chart of the Day email list that you’re on, if you haven’t signed up for the email list on Option Market Mentor go ahead and do that. I’m going to slide this over, you just go the home page and you can sign up for it right here. Here’s why, we’re like right in the process of rolling out Option Market Mentor, we’ve actually kind of started the process, so if you’re interested at all in not just trading options, anybody can do that, but if you are interested in learning how to trade them from a risk management perspective and learning how to do it correctly and profitably, at least sign up for the email list so you can get more information on that, I promise you it’s going to worth your while. All right that’s it for today. Free Chart