3 Stocks I Saw on TV
Every day a lot of us watch CNBC, maybe Fox Business. Generally speaking a lot of the same stocks are talked about, but there are quite a wide number of them. So what I am doing in these 3 Stocks I Saw on TV video is to do just that, talk about 3 stocks I saw on TV, 3 stock that I think are worth mentioning. The bottom line is, I’m just trying to make your life a little bit easier by pointing you to stuff that you should be looking at, because other people are. So lets get right into it. I want to look at Google ( NASDAQ:GOOGL ), Bristol-Myers ( NYSE:BMY ), and Starbucks ( NASDAQ:SBUX ) today. Look, Google ( NASDAQ:GOOGL ), they report earnings on February 1st, so it’s still a few weeks from now, right? A Goldman Sachs equity strategist, a guy named David Kostin, I’m sure he’s a nice guy and probably very, very well known, I’ve just never heard of him, which is probably more about me than him. But he likes Google ( NASDAQ:GOOGL ), or I should say Alphabet.
The main deal is, from what I gather, he likes their new structure, the whole stupid Alphabet thing as opposed to Google ( NASDAQ:GOOGL ). He likes the way that will allow them to breakdown their earnings and we’ll be able to see how wonderfully profitable the company is. That’s all well and good. Here’s the thing: I would suggest between now and February 1st, when the company reports earnings, you use yesterday’s low of 719.56, why don’t we just say 720.00; you use 720.00 as your basis for putting in a stop. This occurred on fairly high volume yesterday so you’ve got to respect the power of the bears though. If the stock starts falling below 720.00 then you’ve really got to look at this as a stock that’s pouring out of a volatility squeeze, in the wrong direction.
Now, what’s the stock going to do in response to earnings? Honestly, I have absolutely no idea. Now, here’s another honest thing that some people won’t tell you, neither does anybody else, they’re guessing. They can talk about, they’re so confident and this and that and, “Oh I’m a buyer right here. Or I’m a seller right here.” But seriously, they don’t “flipping” know. And half of those people that are telling you, “I’m a buyer or I’m a seller,” actually really aren’t. They’re not putting their money where their mouth is. They’re expecting YOU, hoping for you to put YOUR money where their mouth is and then if you make money you’ll remember them. And if you lose money, well they’re hoping you forget them.
So lets not do that. Between now and February 1st when they report earnings I want you to use yesterday’s low as your stop. Don’t be a true believer in this stock if it continues to fall, because it has broken a downtrend. Now, between now and February 1st, because I may not be coming back to this stock and while I’ve got your attention I might as well take advantage of it. If between now and February 1st this stock continues to fall, and continues to fall, if it gets close to this 200-day moving average after ultimately getting this kind of a discount, I would absolutely be interested in buying it before earnings; just because a lot of the downside risk has already been taken off the table. We’re not there yet. And so I’m just suggesting, again, yesterday’s intraday low, that’s your stop.
Okay, Bristol-Myers ( NYSE:BMY ), they report earnings on January 28th, so just a couple days before Google ( NASDAQ:GOOGL ). By the way, look at this. Now lets go back and look at Google ( NASDAQ:GOOGL ), it’s kind of the same pattern. This is a little bit more pronounced, lets just say it’s a few days ahead. Again, I have no idea what Bristol-Myers ( NYSE:BMY ) is going to report. Hey, they make drugs. If you think you do know exactly what they’re going to report, you’re doing drugs. Don’t do that. Do the same strategy here. The low. 61.98, we’ll say it’s 62.00. Today’s intraday low, 62.12. You see how magically these support levels tend to hold? Look, this is a broken stock, it’s below the 50-day moving average.
If you want to be buying this stock anticipating some kind of a rally into earnings, now’s your chance to do it. And you can do it with a fairly tight stop. In other words you are not taking much risk. You’re taking a couple percentage points of risk here in buying right now, or I should say Wednesday morning, with a tight stop. If the stock continues to fall, and again, it’s a busted stock, it’s fallen below the 50-day moving average. If it continues to fall, too bad, so sad, you took a small risk to catch this kind of a bounce, because this David Kostin told you that he thinks this is a stock that you need to buy. What I’m telling you is, just manage your risk, that’s all.
And then the last one I want to look at here is Starbucks ( NASDAQ:SBUX ). Starbucks ( NASDAQ:SBUX ), I guess you could say it’s a broken stock, but the way this thing’s trading, not really. It’s just been drifting down until what? Till it’s tested the 200-day moving average. They report earnings on the 21st. That is 9 days from now. That’s not very far away. So what I would suggest doing on this is, wait for it, wait for it, that’s right you use the last intraday low and the 200-day moving average, which is right here, 55.90, so we’ll say 56.00. Use this as your reference for stops. And when I say, by the way reference, I don’t mean put your stop at 56.00. I mean look at this and say, “Okay, well that I would say is support. So if the stock violates that then I’ll go ahead and sell the stock and then just say, okay I’m wrong.” And so you don’t put your stop right at support. Because how many times have you seen a stock pull back to support and then bounce? Hello, that’s why they call it support. Instead you put your stop a little bit BELOW that level, put it a little bit below.
But make no mistake about it, the market is really, really weak. And by the way, we’re setting up for an oversold bounce, we kind of got it, it’s been a tepid one and not particularly impressive, but nevertheless there it is. But look what Starbucks ( NASDAQ:SBUX ), Google ( NASDAQ:GOOGL ), and Bristol-Myers ( NYSE:BMY ) have in common, really kind of a broken 50-day moving average, drifting lower, looking for a bounce. Here, DEFINITELY a broken stock looking for a bounce. And Google ( NASDAQ:GOOGL ) a broken stock looking for a bounce. So all of these are the same and I would imagine all of them are going to follow through to some extent if the S&P 500 continues higher as well. If it doesn’t, then frankly, look for those stocks just to flame out.
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