Hertz (HTZ) and Avis (CAR) had some strong moves today. Here’s the trade(s). (April 02, 2013)
CAR HTZ CAR
I’m Dan Fitzpatrick at StockMarketMentor.com on Tuesday, April 2nd. Lets look at a couple of companies that you’re probably familiar with if you travel at all. One is Avis ( $CAR Avis Budget Group Inc. ) the other is Hertz ( $HTZ Hertz Global Holdings, Inc. ). This looks to me not like a blow-off top, but maybe just a little bit of a climax high. You can see this stock traded on pretty high volume. Let’s go over to Hertz ( $HTZ Hertz Global Holdings, Inc. ). You can see what? Both of these have been on fire, I mean they’ve really been moving nicely and the reason is Hertz ( $HTZ Hertz Global Holdings, Inc. ) gave some really bullish long term earnings guidance, so what happened? Well the stocks been moving up, it’s been moving up because buyers have been more aggressive than sellers. Okay, a little pullback yesterday then all of the sudden today they come out with this news, so all the folks that were buying here they decided to buy some more, no. This is the last gasp, this is the folks that have been waiting to buy or they were just looking for something to buy and they saw the news and said, “Oh, I’ll go ahead and get Hertz ( $HTZ Hertz Global Holdings, Inc. ) before anybody else does.” So what happens? The stock gaps up in the morning, it’s flopping around here a little bit, they open and close right basically in the middle of the range so this is a standoff. Well here’s what you do; if you haven’t bought, don’t, wait for the stock to settle in there’s, actually in my view, nothing wrong with this uptrend, you can see it’s moving really, really nicely, but the stock just has gotten, as they say, ahead of itself. Based on this news you wonder, well okay what’s a catalyst for higher prices? Answer, can’t think of anything. There is no real catalyst for higher prices. So what do we do? We don’t do much we wait and see. Similarly with Avis ( $CAR Avis Budget Group Inc. ) you’ve got kind of even a more bearish tone here because the stock moved way up and then is closing near the low of the day. But once again, there’s nothing wrong with this trend. This is a stock I think you can be patient with. My bet is over the next few weeks you’ll still be able to get it at this price. So I want you to just watch Avis ( $CAR Avis Budget Group Inc. ) and Hertz ( $HTZ Hertz Global Holdings, Inc. ), give these stocks a little bit of time to consolidate just like they’ve done so many time before and I think you’re going to be rewarded by still going long these stocks, just not right now. Okay members over to the Strategy Session. Free Chart