The best trade on Fitbit (FIT) is…not to trade it. (July 01, 2015)
Lets look at Fitbit ( NYSE:FIT ), I’ll bet you didn’t know it had been trading this long, did you? Actually it’s a 15-minute chart; I’ll get to the daily chart in just a second. I want to show you something, to be honest I’m too lazy to change the 50-period moving average and the 200-period moving average. This works just fine for a daily chart, but nobody really cares about what the average is of the last 50 15-minute periods, so don’t pay attention to those.
I want you to pay attention to the Bollinger Bands, these tight little puppies here, here’s why: again, it’s a 15-minute chart, you can see that throughout these days towards the end of the day, the stock just really drifts sideways in a really tight squeeze and then it pops out one way or another. I even talked about that back here when the stock first started trading, how the deal is you just look at it late in the afternoon and then when the stocks pops in the morning you look to sell it in the first hour or so.
So then we get a drift down; you can see what happened here on some pretty heavy volume when this broke out and then has been trading up ever since. But this is what I want you to know, I was looking at some of the posts in our trading forum today and a fair amount of traders have been in this stock, they’ve been trading it, trading it profitably, “Oh I got in, I got stopped out but it was a nice profit and so now I’m looking for a re-entry, etcetera, etcetera.”
I love to trade. I trade just about every day the market’s open unless I don’t trade that day. I take trades when I find them, not when I demand to get one. The point here on Fitbit ( NYSE:FIT ) is, and I mentioned this in the forum, I said, “Frankly I don’t think you want to be trading Fitbit ( NYSE:FIT ), I just think you want to own it. I have one of those “Jawbone” things that tells me how much I slept or I should say how much I didn’t sleep as well as how many steps I took as opposed how many I should have taking, and that works just fine for me. As long as I sync it to my iPhone everybody’s happy.
Fitbit ( NYSE:FIT ), I don’t really get their stuff but it doesn’t matter. Here’s what matters: you can see the uptrend here, just buy the stock and hang on. But look at the daily chart; this is a pretty powerful chart. It only started trading back here on the 18th, it’s been trading a total of 9 days, 9 trading days. It’s already had what I call its “enthusiasm high” from where the stock initially opened right there, traded all the way up to this level.
It was a huge move, everybody’s talking about how Fitbit’s ( NYSE:FIT ) going to the moon, up above $40.00. So that was the initial move, this is like the maximum power of the bulls who just can’t wait to get in to Fitbit ( NYSE:FIT ), this is all the stock pulled back, 20 percent. Since this huge run up, 20 percent, that’s enough to make you puke if you’ve got a big position in a stock, you should never be taking a 20 percent loss on a stock, but that’s all this thing pulled back. And then has been, recall the 15-minute chart, it’s just been strong as death for the last few days.
This is now at a new high, and so I’m saying don’t trade Fitbit ( NYSE:FIT ), just buy some of it, I’m not a stock fan I’m a chart fan; buy this chart and just hang on to it. You’ve got higher intraday lows, higher intraday highs, it’s all working on increased volume. I don’t know when earning are due to be released but it isn’t any time soon, so just own this stock, find other stuff to trade, this is not you’re trading stock.
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