Thinking of trading FireEye (FEYE)? Watch this video or get burned. (August 06, 2014)
Here’s a quick comment on FireEye ( NASDAQ:FEYE ). The company announced earnings this morning and it didn’t really go particularly well, the stock fell 11.5 percent, which is a really, really nasty move.
So here’s the deal, do you buy this stock? I think you don’t go anywhere near this stock until this level is tested. The way this stock is trading, you’re looking at this thing, it’s up and now it’s starting to roll over. So this is just not anything that you want to get all lathered up about as far as, “Oh my gosh, it’s down 11.5 percent I want to go buy that stock.” Guy Adami was talking on “Fast Money” about how essentially the management team has kind of lost creditability; they beat estimates but they’re still losing money.
The point is, this could ultimately turn out to be a really good trade, a really good stock; but it’s down too far for you to want to short this stock, plenty of volume but it’s down too far for you to want to short the stock. There’s not that much downside before it’s going to find some support somehow. I think what you want to do is stand aside and then wait for some kind of an open candle. In other words wait for the stock to finish doing it’s deal and then what you want to see is something that looks like that, whether it’s there, whether it’s there, whether it’s down here.
You want to see something where the close is higher than the open. If you’ll wait for that at least you know that you’re not buying right at the low, or I should say you’re having a better chance of buying close to the low, you’re not buying right at the low. If you’re waiting for that open candle then ultimately what you’re going to find is you’ve got a better chance of riding this thing higher. So just stay away from this thing; I can’t help it I’ve got to go for the joke, stay away from this thing because I don’t want you to get burned by FireEye ( NASDAQ:FEYE ); I couldn’t help it, sorry.
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