After Comcast (CMCSA) bought the rest of NBCUnivision, what’s the trade? (February 13, 2013)
CMCSA
I’m Dan Fitzpatrick at StockMarketMentor.com on Wednesday, February 13th. By the way don’t forget it’s Valentine’s Day tomorrow so you need to take care of that or you’re going to have big problems. Okay listen, in today’s chart I want to look at Comcast ( $CMSA Comcast Corporation ), and this is why. They announce pretty good earnings tomorrow morning and the stock popped on that. But I think probably more importantly was that they also announced that they acquired the remaining stake in NBC Universal from GE ( $GE General Electric Company ). They’re paying sixteen point seven billion for it, but the market liked it, at least you’d thinks so because the stock is still closed up about three percent. But look what happened, this thing really gapped up high at the open, this is called the gap and crap, not my term, I actually stole it from someplace else, I don’t know where or who, but you know, twice used is once stolen, and I’m not the first guy that used to it. But anyway, the saying remains, the phrase remains, gap and crap. So the stock opened up at $42.00, it traded to $42.00, that’s it and then it fell the rest of the day. First of all this is a type of thing that I call a fifty-nine minute trade, where you wait to see what the stock is going to do first thing in the morning, when it’s moved big like this and then trade accordingly; I’ve actually created a course called “The Fifty-Nine Minute Trader,” which you can check out on Stock Market Mentor if you want. But this was a perfect trade for that, short at the open, Boom! Closed before the end of the day, actually about ten thirty or so should get it done. So what are we going to do now? All right, the fact that this closed up relative to yesterday’s open is really significant. However, this creates a lot of overhead pressure on this stock. I don’t think this thing is in danger of running away without you. I would actually still want to buy Comcast ( $CMCSA Comcast Corporation ), I just wouldn’t want to buy it right here, right now. You look at the trend though, this is a stock that you just want to buy and hold. I can’t say that this is a climax high, like it’s a blow-off top. This is not a blow off top. Blow off tops occur when a stock has been moving higher and then suddenly, basically goes like parabolic and finally, Boom! And then it reverses on massive volume. This, is not that, the stock had been trickling higher in a nice gentle fashion, I don’t think, really, this trend is over. I think you want to still use the fifty-day moving average as a reference point for your stops, but don’t buy just yet. I think you’ll get a chance to buy this closer to the fifty-day moving average. However, if this stock is kind of firm tomorrow, and we’ve seen this lately with companies, where they do this very thing or perhaps even a move like Linkedin ( $LNKD Linkedin Corporation ) did, which I covered the other day, where they move really, really high, you expect them to pull back and then they don’t. That’s okay to start scaling into, you just have to have a long-term time horizon and I know so many of you don’t. You think you have a long-term time horizon, you’re going to buy a stock and hold it because you like this trend and then three days later you sell it because it’s lost two percent or its gained three percent and you want to book some profits. So don’t do that here, be patient with Comcast ( $CMCSA Comcast Corporation ). Again, I would buy it on the dip; this is not a dip yet, this is just a big reversal of the stock that opened up way too high for it to go any further. So a bit, if starts getting down to about $39.00, that’s a better entry. Okay members; get over to the Strategy Session. This is really not a buy and hold market, it’s kind of like you did buy didn’t you? Now you want to be holding. So we don’t want to be trading around a whole lot, but I’ll get into that more in the Strategy Session. I’ll see you there. Free Chart