3 Stocks I Saw on TV – DAL, FCX, TWTR (January 15, 2016)
Every trading day a couple of things happen, I wake up, CNBC goes on, and the opening bell rings. I guess that’s 3 things, right? If everything goes according to plan. There are a lot of stocks that are featured on TV and what this video is intended to do is bring 3 of them to you, 3 Stocks I Saw on TV, and give you a trading plan for each. So lets just jump right in.
Delta Airlines ( NYSE:DAL ): They reported this morning, they actually missed expectations but they’re projecting better margins. That’s a good thing. When margins expand so do profits, ultimately. So the market looked at that as being a good thing. But if you look at JetBlue ( NASDAQ:JBLU ), no love there. Hawaiian Holdings ( NASDAQ:HA ), no love there. American Airlines ( NASDAQ:AAL ), no love there. United Continental Holdings ( NYSE:UAL ), there’s really no love anywhere, not even in LUV ( NYSE:LUV ). So that takes us back to Delta Airlines ( NYSE:DAL ). What I’m seeing is a stock that gapped up to the 200-day moving average and is now stalling out there.
Frankly, over on Option Market Mentor, we sold a bear call spread, selling the February $48.00 calls, buying the $50.00 calls as insurance for a 50 cent spread, 50 cent credit, which actually worked pretty well when you think about the fact these guys have already reported earnings. They’re not moving up any higher, they’ve already done their deal. They’re up 3 percent from the pre-earnings close. What makes you think that the stock is ultimately going up 8 percent, which is where it would have to go in order to make that trade an unprofitable one? I like Delta ( NYSE:DAL ), to the short side.
Freeport-McMoran ( NYSE:FCX ): This stock, this was up almost 6 percent, 5.7 percent pre-market, because China reported some GDP numbers that were “in line”. Well, as we realize the GDP numbers might have been in line but they’re not that great. So Freeport ( NYSE:FCX ) actually gave folks a chance to short into that misguided buying. I will say this about Freeport ( NYSE:FCX ), I’m joking, but not my much, it’s $4.06 away from ultimate support. This stock is NOT one you want to get into. It is way, way, way oversold, if you want to put it that way. The stock’s lost 90 percent of it’s market cap since here. Just don’t be bottom picking this thing because you’re going to wind up not doing really well. I would just totally want to stay away from this stock. Just stay away from it. When the bounce occurs, and at some point it’s going to bounce. When the bounce occurs you’ll have plenty of time to be there, if it’s a real bounce. But so far all of these things have just been fakeouts. So don’t fall prey to the next one.
Twitter ( NYSE:TWTR ): Speaking of above support, as I started on doing some research on this video this thing was actually in the high 17.00’s. As I do this now, this thing is $16.91 above support; soon to be, probably, 16.85. Look, the company had an outage, people were having a hard time twitting their tweets, or whatever the heck they do, and the stock just continues to go lower. Frankly I don’t think it has anything to do with the fact that Twitter ( NYSE:TWTR ) went down a little bit. It does that on occasion, so does every other website on the web. So don’t pay any attention to that. What I want you to do is pay attention to the trend.
This trend is down in EVERY way. There is ABSOLUTELY no reason to believe that 16.91 is a bottom; 16.00, 15.00, I don’t know where the bottom is. There will be one, and this is accelerating. I couldn’t be short this stock. I wouldn’t be shorting this stock, because it’s just poised to be some kind of a snapback rally. But I ABSOLUTELY would not be interested in buying this stock and thinking like, “Oh, I’m getting it on the cheap.” Recent IPO’s, and this is one of those, that crater like this, they crater because the market anticipates that the best growth was yesterday’s growth. It’s like the Seals, the only easy day was yesterday. With Twitter ( NYSE:TWTR ), the only good day was yesterday. The only good year was last year. So stay away from this one. Don’t even go anywhere near this, and you can tweet that, if you want.
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