Buy the dip? Don’t go there…. (November 07, 2012)
ROST DLTR COST
Good evening Dan here on ugly Wednesday. We are really nasty sell-off in the market today and I suspect it’s going to continue but I just want to follow couple of the stocks that we’ve been looking at; Ross Stores ( $ROST Ross Stores, Inc ) and I we’ll look at one or two others. The discount stuff is not working, not much is working except cash. But as long as, here’s the thing, it’s really easy to stay out of a stock that just continues to print lower highs and lower lows, and this is how you do it. You resign yourself to the fact, number one, that you’re not going to catch the low. First of all if you’re looking to buy this thing, why, why? Is this like the best you can do in the entire market? Are you so devoid of imagination that all you can do is sit here and look at yesterday’s winner? You know, oh my gosh, this thing what from $33.00 up to $70.00. Great! Do you really think it’s going to do that again? How come nobody wants your stock now? Stocks down here at $56.00, well golly gee, the last time it was at that price it went up all the way to here, right, that’s called the trend, this not so much. So what you need to do is step back and look the Weekly Chart and say, “This thing could go a little ways.” You don’t want to be there, it’s a volatility squeeze and expansion to the downside. So what you want to do is, if you must be buying this stock, here’s your discipline. You say, “Here’s the last little, teeny high there.” You say, “I’m not going to buy this stock until it gets above that level, if it doesn’t get above that level I’m not going to buy it.” That way it keeps you from saying, “Okay, I’m going to buy at $56.26 because the stocks gone down far enough.” No it hasn’t; so just don’t go there, that’s all I can tell you. We look at Dollar Tree ( $DLTR Dollar Tree, Inc ), you got the same thing, the stock is not holding after this low here. It printed a lower intraday low today, maybe that’s going to hold up, but in this kind of market, again, is this really a stock that you want to buy? I don’t think so. How about Costco ( $COST Costco Wholesale Corporation )? Well, golly gee, that’s going to do pretty good over the holidays everybody buys their booze there, lord knows I do. Okay, well this looks kind of like it’s almost printing a head and shoulder pattern here. It’s, you know, kind of a really sloppy one, but the bottom line is, this could be, look at it this way, this could be a lower high; so here’s your line in the sand, right there. If Costco ( $COST Costco Wholesale Corporation ) starts trading below that number you don’t want to be there, okay. So here’s just three stocks that I want you at least to keep an eye on, but right now I would stay away from all of them, in fact I would stay away from just about anything in the market until this post-election sell-off runs its course, and fret not, it will run its course, stocks will move higher again, they just didn’t do that today. Okay members, over the Strategy Session. Free Chart