Because of the length of the special intraday trading video, I’m providing an abbreviated "S..
Discussed in this article: TripAdvisor Inc. ( $TRIP )
This Free Chart of the Day is going to be a little bit different today and here is why; I recorded a 45-minute video this morning, for members, which covered intraday analysis and how to manage positions with gaps and things like that. It was a long one and so I’m not going to ask you to listen to a long Strategy Session as well. So I’m just going to do an abbreviated one to get you through and cover some random stocks that members have asked for. But I definitely want you to watch that video because I promise you it’s going to make you money, that’s a promise.
By the way, if you’re listening to this as a free listener, love you, love all of our free guys, but check out Stock Market Mentor’s free 30-day trial, you’re going to love that video. Just do it for that, sign up, watch the video and then cancel, I won’t know about it because I don’t look at that kind of stuff, and I don’t take it personally.
Okay, let’s get to it. The S&P 500, this is the abbreviated Strategy Session. The S&P 500 is just kind of consolidating, its right back at the middle of the range. As long as this level holds here, we’ll call it 16.75, then that would be known as a good thing. But a lot of stocks are extended, others are just flat-out not working, and so this is one of those times when you know I wouldn’t particularly be aggressive in buying this little dip. Why? Well, nobody else is, why should you be? Trade with the trend; when there’s no real trend don’t trade so much.
The Dow Jones is just drifting lower, so there’s really nothing there for us to be doing. The transports were a little bit stronger; I mentioned that the other day. But what we’re really looking to do is to be holding the stocks that are outperforming. There are actually quite a few of them, but they’re starting to drop off so we just want to be in those. There are very few times, at least that I see in the market, where you’ve got trends that are just so clear in some stocks, and this is one of those times, and isn’t going last forever, and it’s not going to last much longer. Some of them are little long in the tooth but there’s a lot of money that’s been made, some more that should be made.
Okay, Nasdaq, it was actually pretty impressive that we got general weakness, and after the Nasdaq has been outperforming the other indexes for so long the fact that it still hanging in here is a good thing. Again, there are a lot of stocks that are working.
Now a few here, TripAdvior ( NASDAQ:TRIP ), I said this squeeze was not going to last too much longer, you can’t really predict when these squeezes are finally going to run their course. However, when you see these squeezes start to coincide with the 50-day moving average, they generally can’t go too much farther, something is going to happen, either up, in this case, or down. So I would stay long, I think that has more to go.
Okay, Celldex ( NASDAQ:CLDX ), all of you that have been trading this stock, you know what I’m going to say, as this stock traded up and then it started to trade down, I suggested, maybe we need to just take a few profits here and don’t be greedy. And then, sure enough, the stock traded down for about 19 minutes and then moved up to new highs. So with that said, I’m going to say it again, the stock was down almost 3 percent today, I’m not suggesting a reversal, not at all, but you’ll see the volume was pretty high on this reversal. I would suggest taking some profits, or at least setting a higher stop on part of your position.
Now again, if prior history is going to repeat itself the fact that I’m urging caution and that maybe you kind of booked some of these profits, because this been a monster run. Its been a heck of a run from whenever it was that you started trading it, at some point you’ve got to say, “Maybe I’ll ring the cash register a bit.” The fact that I’m saying that pretty much assures that Celldex ( NASDAQ:CLDX ) will run up to $50.00 anytime soon.
So trade however you want, I’m just suggesting when you’ve got a real winner like this one, don’t overstay your welcome, but also don’t close out your entire position, if you choose to close out any of it. When you’ve got a real winning position you shouldn’t be closing out your entire position at any given time, or even on any given day. Because what are you really doing? What you’re saying is, “I’m a market timer and I’m identifying the exact top.” Sometimes you can see those tops, they’re very clear like these blow off tops, this is not one of them. So just trade with some discipline, okay?
Tesla ( NASDAQ:TSLA ), the trend is intact, a big correction here down to the 20-day moving average. I have no idea whether this is going to continue lower or not, but over on Option Market Mentor we closed out our Tesla ( NASDAQ:TSLA ) longs today when the stock was higher, because I didn’t like the way it was acting. And by the way if, you’re an OMM member and haven’t closed out your longs, I think you need to pay more attention to what’s happening in the forum and in emails as well, because that was one that went out.
Okay, let’s go on to some sectors here. Energy hasn’t exactly been an out performer, but you can see that this is a pretty clear support level right here on this ETF. I just wanted to show you a couple stocks. Phillips 66 ( NYSE:PSX ), it’s been trading sideways for quite a while. I love these volatility squeezes, when they coincide with not just the 50-day moving average, but also the 200-day moving average, because what that reflects is a stock that’s been in a sideways consolidation for quite a while. So now we just look and wait for signs that the stock is moving higher. That’s when you buy this stock.
Another one I wanted to show you was Halliburton ( NYSE:HAL ), large cap, obviously, simply because it’s back at a good buy point. There are a lot of stocks that have not been performing really well that are at good buy points and so you’re probably going to see some money rotating into those, I’ll go through a few of them here in a second. But Halliburton ( NYSE:HAL ), there’s your buy signal right on the reversal off the 50-day moving average. The uptrend is intact, this is not a short-term trade, the stock will probably continue to consolidate as it grinds around here in a pretty tight range. But as I just mentioned on these other stocks, TripAdvior ( NASDAQ:TRIP ), when it drifts towards the 50-day moving average and the bands start getting tight, they’re not quite tight yet, you can see a pretty nice potential move here.
Okay, so let’s look at some metals, here’s why; just on the XME ( NYSE:XME ). Again, it hasn’t been performing like so many of these other stocks, zigzags, but now we’re down here, and now we’ve got a little bounce, there’s your support line right there. Stochastics are showing heavy downside momentum that’s just crossing over to the upside.
So we’ll look at Freeport-McMoRan Copper Company ( NYSE:FCX ); yesterday was a low, today was a reversal. Yesterday was the better entry, but this still works. You want to wait and see, you don’t want to be the first one out of the foxhole, those are the guys to get the Medal of Honor, posthumously, you want to be the guy behind him. So we get a little reversal here, average volume, but the stock is moving up in a zigzag, so you can take some of this with a stop, say, right underneath there.
Heavy equipment that’s levered to mining, they make the equipment that digs the stuff out; it is just kind of starting to turn around. If you look at the weekly chart you’ll see it’s been in a downtrend, I’m just pointing this out to you because the other metals are working. I don’t think this is a screaming buy right now, I think you’ve got about here as support, maybe about a 10 percent run to the upside as resistance. I’m just suggesting you watch it, just put it on your screen. If you buy this stock here you’re probably going to make some money, it’s probably going to continue to move a little bit higher. But again, it just depends on your time frame. The stock has been in a downtrend for quite some time, I guess you could say this is potentially a double bottom, but it really needs to get up above 55.00 before I would make that call.
Okay, a few more here; CMI, Cummins Engine ( NYSE:CMI ) has been on a heck of tear. This has been kind of prolonged; flag patterns only last a matter of a few days, maybe a week, so I wouldn’t really call this a flag pattern, it’s something else, but the stock is trending sideways. There’s your support, right there. The best time to buy a stock like this is on a deep pull back to the 50-day moving average. So if you’re buying now you’re being kind of aggressive, but the stock could have some upside, just make sure, if you are making this aggressive buy, that you have to stop underneath there.
One that I haven’t covered in a while, Lear ( NYSE:LEA ), they’re in the automotive sector. This is also trending sideways, nice volatility squeeze. I would suggest watching this for an upside breakout as well.
Now, a few member requests that I’ll go through real quick; Verizon ( NYSE:VZ ), the member is a long-term holder; okay it pays a 4.5 percent yield so that’s fine. On a weekly chart you can see this stock, and this is a long-term hold, you can see this stock is actually at a pretty good buy point right now. If you’re counting on this being a long-term hold you can just expect that. The issue that I have with this is this; this is a broadening formation and typically these resolve in a bearish manner, because what happens is the stock can’t get up to reinforce this resistance line here, so it ultimately prints a lower high, which leads to head and shoulder pattern, and that’s not good.
So what I would suggest is, just use this as a stop, Verizon ( NYSE:VZ ) isn’t going out of business, that’s for sure, it’s just that the stocks kind of weak here. It’s not something I’m interested in trading myself, because you look at the configuration, just look at the configuration of the moving averages, first of all the price is the lowest, then it’s the 20, the 50 is just crossing below the 200, which soon, like tomorrow, will be the highest moving average. So this is technically, in a really nasty downtrend with downside stochastics to momentum, so it’s really not where I’d want to be.
Okay, Whiting Petroleum ( NYSE:WLL ), if you’re long enjoy the ride, and I think this member was, but I wouldn’t buy it now, just because it’s too extended. That’s not to say it won’t go higher, it’s just that to buy a stock that’s this high above the 50-day and certainly the 200-day moving average, it’s just aggressive, you’re being really aggressive here, and think about this, how much higher is it going to go from here before it ultimately peters out and goes lower? Is it just going to keep on moving? Maybe, it pays a whopping dividend yield of, I know, nothing. So at some point this is going to stall, probably even pull back a bit, so it’s not something that I would be interested in.
Now Cree ( NASDAQ:CREE ), this is not the time to buy. The stock rested today, but after the kind of move that it made yesterday, like eight or ten points, something like that, this is due for a rest so I would want to buy it on any kind of a pullback. If you’re a nimble trader then what you do is, you look at yesterday’s intraday high, of $70.09, set yourself a price alert, say at $70.00, that will draw your attention back to it. If the stock starts trading above this last resistance level here, as a fast trade, you’ve got to babysit this thing, this stock should move higher from there; that’s not something that I would be “quote” predicting, but that is the trade. You wait for the stock to hit a new high after this kind of move and you say, “Well, I think I don’t know how many folks are short this stock, but they’re probably doing something else in their shorts if this stock starts hitting a new high versus yesterday.” The best deal though is if the stock pulls back.
Okay, just one more here, Bitauto ( NYSE:BITA ), this is one that I think we’ve been and since 14.00 or something, we haven’t been in it for a long time, but it’s one that I mentioned, a while back, as a really good possibility for future moves, and that’s what it’s doing. The last couple days have been really good runs for us, I would just stay long, you can see what’s happening here, it’s just a monster move. I would want to stay long some of this stock, but I wouldn’t be adding to positions now, it’s a little extended. You can use today’s intraday low as a reference for stops if you want, but this is a really, really nice stock, its trading at much heavier volume, so this is under accumulation. If the big guys are buying it, why aren’t we? I know, we are. So let it rest a little bit before you add to your position.
Okay, that’s it for this Strategy Session and Free Chart, actually it’s a free Strategy Session, way longer than I intended it to be, not as long as the usual one, so I hope you’re using the fast forward feature so you can spend some time with your family, workout, rest, have a beer, whatever. Again, try Stock Market Mentor if you haven’t, it’s a free trial, am I pushing you? Yeah, I am, because I believe that you need this in order to make some money. If you want to ramp your trading results why don’t you join a bunch of people who are already doing that? You can be one of them.