Here’s a short-term trade that just might be a good long term investment. Look at Lithia Motors (LAD) (January 23, 2015)
Look at Lithia Motors ( NYSE:LAD ); I mentioned this last week when the stock was somewhere down here, I think it was on the 21st. What I was talking about was this bounce off the 50-day moving average; you want to put a stop just a little bit below this level. The stock is still moving up; it’s been a pretty nice trade. So now lets look at it, what are we doing here?
We’ve got to look at the $90.00 level as short-term resistance. If you are just trading this for a quick bounce I wouldn’t just look to sell it at 90.00, just use a trailing stop because upside momentum is pretty strong. You’ve got to tip your hat to this resistance level because it did hold last time, that’s actually form resistance from back here, but if you look at the weekly chart I kind of like the way this is setting up for a longer-term hold.
They don’t announce earnings until the week of February 17th through 23rd, which is what Yahoo is saying. Look at about $90.00, if the stock starts trading above this $90.00 level I think it’s going to continue to move, so don’t just ditch it because you happen to get in a good entry and so, “I’ll just take a quick profit here”.
Instead watch how the stock trades around $90.00, you can have a trailing stop if you had a short-term trade but don’t shy away from holding this for a longer period of time too, because the stock has been working for years, long-term consolidation. This is the stuff that real secular uptrends are made of so I think this is a stock that you can hang on to.
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