3 Stocks I Saw on TV: SHAK, GPRO and JPM
Every trading day at least a couple of things happen,other than me getting out of bed. First, the opening bell rings. And second, at some point of the day I’ve got CNBC on to see what happens. So what I’m trying to do in this video series is look at 3 stocks that are most topical and the most interesting. Then pass on my observations to you, and together lets try to make some money. So these are 3 stocks I saw on TV today: First, Shake Shack ( NYSE:SHAK ). The CEO was on this morning talking about their new chicken burger, which is kind of like Chick-fil-A, only nothing like it. He was also talking about Chipotle ( NYSE:CMG ), which I thought was pretty cool. He was just saying, “Hey, we support those guys. We’re sure we’re going to get it figured out.” The bottom line is this: Shake Shack ( NYSE:SHAK ), it has just absolutely been dumped on since peaking here. As I’m doing this video it’s lost two thirds of it’s market cap.
So my question is, is this stock done going down? Now what’s the catalyst for a move higher for a quick reversal? Is that earnings? Not so much, they’re in March, so this stock has some room to go on the downside. What’s working in it’s favor, in my view, is this: today’s low was $30.00. That’s the even number, and I can see a lot of folks looking at this saying (I’m talking about money managers, not Billy Bob with his little $5.00 trading account), a lot of folks will look at this and say, “Hey, $30.00, I want to buy this stock.” It is still super expensive. Their revenues and earnings growth are good, but their P/E is huge, so that’s an issue. If you are going to buy this stock I would suggest you keep a stop just a little bit under $30.00. Look, the trend is low, but if I had to choose right now for either buying or selling, I would buy, just because of the way this pattern has unfolded today. Heavier than average volume, big down day, intraday reversal, and it’s closing near, we’ll just say at least in the top half of the range, which is like new, it hadn’t done that in a while. So that’s my suggestion here. Keep a stop under $30.00 if you want to buy this stock. By the way you could also sell puts at 30.00 or even a lower strike price and then if the stock gets put to you, great, you got it at a low cost basis. If the stock doesn’t get put to you, that’s called free money.
GoPro ( NASDAQ:GPRO ).They reported, after the bell last night, that they lowered guidance. They’re kicking out some employes etcetera, etcetera, and my suggestion was, the stock could go really low, I suggested, though it wasn’t a guess, it was just me saying, “Hey, this thing could even go below 10.00.” But my point on the trade was, wait for the stock to open up and you only buy the stock if it is ABOVE the opening print. Now, this is what happened just on the 1-minute chart during the day, in the morning. The stock opened up down here, this was the high after the first minute of trading, right around 11.75 or so. You could have just bought the stock then and put a stop a little bit underneath, we’ll say the low was 11.26, so you’ve got a 50 cent range, put a stop in the teens here. A very, very tight, VERY tight stop since the stock already gapped down so much the only reason you’re buying this stock is because you believe this is overdone, so you put a stop a little bit below the low here, I’d call it 11.15. You put a stop at 11.15 and you’re riding that thing all the way up.
Now as I do this you can see this stock is tailing back a little bit into the close, a lot of selling pressure. But the bottom line is, the trade worked. And that’s all I wanted to show you. I haven’t been a fan of GoPro ( NASDAQ:GPRO ), actually ever since I heard what GoPro ( NASDAQ:GPRO ) was, as a publicly traded company; I thought it was a nice camera company and that’s about all. So take that for what it’s worth. I wouldn’t buy it other than for a trade by the way. I’ll just sum that up, because the trend is just horribly down. They report earnings on February 3rd. I could not even tell you where the stock is going to go. It might go up to $20.00 it might go down to 10.00. I just know that for now you had a good trade to the long side, adhere to your stops and you can’t go too far wrong.
JPMorgan ( NYSE:JPM ) reported earnings this morning; they beat estimates. The stock jumped up a little bit, but this is kind of like a “nothing done”. It’s not a bad thing, but this is an inside day, where yesterday’s open was right here. Yesterday’s close was right down here. Today’s trading is completely engulfed by yesterday’s trading range. So this is basically traders looking at each other going, “Well what do you think? Well I don’t know, what do you think? You want to buy it? Not really. Do you want to sell it? I wasn’t really thinking about it.” So the point is, with JPMorgan ( NYSE:JPM ), the trend is still down. Goldman Sachs ( NYSE:GS ), the trend is still down. Morgan Stanley ( NYSE:MS ), the trend is still down. Don’t be a true believer. Don’t believe that this is the bottom in JPMorgan ( NYSE:JPM ). The stock’s just consolidating after reporting earnings, but this is a stock that I would not be eager to buy. By the way, if you are long it use about $57.00 as your reference for stops. Because this stock is falling out of a volatility squeeze. It’s really not showing too many signs that it’s going to reverse, in fact as it falls the volume is picking up.
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