Strong stock on a really weak day in the market? Let’s sell it. Here’s my take on QIHU
Discussed in this article: Qihoo 360 Technology ( $QIHU )
I just want to go over Qihoo ( NYSE:QIHU ) here and this is why; the company reported pretty good earnings, really good earnings, surprising. And even after this move, back in April the stock was at $30.00, now the stock is up at 80.00, or the mid 70’s, that was a heck of a move.
What happened? We got a gap up and a hold. It did not gap and crap, it didn’t gap and run, it just held; that was yesterday. Now today, the stock actually printed a new high, a new intraday high, which is really important, particularly since the S&P did this, which is also really important, but that’s for another day.
So we’ve got Qihoo ( NYSE:QIHU ) that yesterday was completely outside the upper Bollinger Band; today a higher high, and the low, it still closed outside the upper Bollinger Band, but a little bit closer to it. Here’s my point, you’ve got really strong buying here on Monday, you’ve got really strong buying here on Tuesday, but not as much as yesterday. I like stocks that are really strong on days when everything’s weak, those are the ones that I want to buy.
But here, I look at Qihoo ( NYSE:QIHU ), it’s definitely one that I want to buy, but right now my suggestion would be you sell it. I’m not saying to short it, but my suggestion would be you sell this stock. Why? Because the stock gapped up, it held high volume, today, not as much trading activity, but still strong. What I’m saying is, I think the markets giving you a second chance to be greedy, or to get away with being greedy, I should say.
So my bet is, this stocks going to struggle at $80.00, and will probably hit 75.00, maybe even 70.00, I don’t know, before it continues to move higher. I could be wrong but that’s the way I’m trading it. If the stock falls back down into the low 70’s maybe 70.00, maybe even lower, you want to buy this stock. This signal means something, these two high closes, particularly today on a really lousy day in the market, you’d think this would just kind of sell-off; they mean something. But they’re going to mean more a week from now than they mean right now.
In other words, you let this stock come in, and the fact that it was so strong here should mean that this is one that I want to buy on weakness, as opposed to some of these other stocks that have been crushed, you can expect a little bounce, those are ones that you want to sell on strength. So here, it’s a buy on weakness, anticipate some weakness, look for a pullback, and that’s when you want to buy Qihoo ( NYSE:QIHU ) again.