3 Stocks I Saw om TV: SCTY, TSLA, DIS (February 09, 2016)
SCTY LNKD TSLA DIS
If you’re a hardcore trader you’ve probably got CNBC on all day. You watch the Opening Bell, you watch Power Lunch, you watch the Closing Bell, Fast Money, Mad Money; you kind of see it all. During the course of the day you’ll see all kinds of stocks covered, all kinds of news flashes, new stocks, earnings, downgrades, upgrades, stuff like that; a lot of stocks. I’m here to talk about the 3 stocks that I saw on TV and tell you what you didn’t HEAR on TV, and lets see if we can make some money,
First up today is Solar City ( NASDAQ:SCTY ). Where is the little blue arrow here? We always have the blue arrow right where the current price is. Lets zoom down, there it is. What happened? The company actually reported a profit, which was good. The problem is they had really, really poor guidance. The market, traders, you and me, we don’t really care what kind of money a company made over the last quarter, that money is already in the coffers, it’s already baked into the price of the stock. What we really care about is, what are our expectations, what are the market’s expectations and what are the company’s expectations for how well it’s going to do going forward? So when a company guides down traders are going to say, “Well the multiple that I was willing to pay, based on these great earnings, that’s not the multiple I’m going to pay next quarter or the quarter after that”. Because the company is saying, “We aren’t going to be doing do well.” So the stock trades down, really down. Think Linkedin ( NYSE:LNKD ). And by the way, buying this first bounce on Linkedin ( NYSE:LNKD ), I’m digressing here. Buying the first bounce here, “Oh, it’s a nice up day.” Great! This is the low, that doesn’t work.
When there is no immediate bounce on the stock, and there wasn’t yesterday, you don’t want to sit around and wait for everybody to realize that Linkedin ( NYSE:LNKD ) was supposed to bounce. “Oh, but the stock took how much of a haircut? Oh my gosh! It’s down by 43 percent. Well that ‘s got to be enough. That’s got to be oversold.” Well, not really. Now it’s down almost 50 percent. My point is this: When you see Solar City ( NASDAQ:SCTY ) trading tomorrow, for a TRADE it might be worth buying the stock just because it’s fallen so far outside these Bollinger Bands, from a statistical standpoint; these bands either have got to really stretch down a lot or the stock maybe will bounce a little bit. But I’m telling you, this is a stock that’s kind of been in a downtrend for a while, for the same reason that Tesla ( NASDAQ:TSLA ) is falling, which I’ll get to in a second. You’ve got to think about this too: Solar energy, with oil so cheap, from just a thematic standpoint for investors, they’re not really going to say, “Wow! Solar is the thing of the future.” And I get the whole thing about global warming or now we call it climate change because the earth isn’t really warming, but we still want the global tax. I get all that. But with oil so low, frankly you’re not going to see that much of a move into solar. So just keep that in mind. If you’re buying this stock tomorrow, seriously, it’s for a trade. It’s ONLY for a trade.
Now, Tesla ( NASDAQ:TSLA ). They report earnings after the bell tomorrow. Here’s the thing with that: They’ve got a couple of things happening here. First of all there was a price downgrade after hours. It was like from 180.00, I think it might have been Barclays but I don’t really remember, and I don’t really care which one it was. I don’t care what any particular analyst thinks about a stock, unless it’s Dan Niles talking about semi-conductors, but that was last century. They downgraded from like a180.00 price target to a 165.00. All right, well the stock is down at 150.00 now so it better turn around pretty quick. But here’s the thing with Tesla ( NASDAQ:TSLA ), there’s a couple of things going against it. First, you know that Model X, that’s the Gullwing (I’m actually moving my arms right now, but you can’t see). The Gullwing, falcon wing, whatever you want to call it, they’re having a problem making those be gull wings or falcon wings where they actually open. So that’s a problem, because everybody can want the car but they want it to work right. If investors don’t think that it’s going to that’s going to be a big deal.
So frankly it’s not just what the earnings number is going to be tomorrow that’s important. It’s going to be what Elon Musk has to say about their assembly line. About their ability to get that thing to work. That’s a big deal. And that’s part of the reason, I mean this looks like a Thelma and Louise, like they got in a Tesla P85 and are flying off a cliff. This thing can go a lot lower. It has always been an expensive stock. It’s what Jim Cramer calls a cult stock. You’re a Teslonian or you’re not. Just like in the old days, Apple. People just believed in Apple, it didn’t matter what it did. Now it’s Tesla ( NASDAQ:TSLA ), or at least it was Tesla ( NASDAQ:TSLA ). So don’t look to just buy this on the dip. Wait and see what earnings are going to be tomorrow. See how the stock reacts to those earnings. And then you can make a little trade. Frankly, just spitballing here, I’m tempted to buy a few puts on this. Even though I know they’re super expensive. But when I look at this chart, I hear about issues with their production line, and I hear about 20.00, 25.00, maybe $30.00 oil, suddenly electric cars for most people aren’t really the thing. I love my Tesla, but I didn’t get it because I didn’t want to put gas in the tank. That was just a side benefit.
The last one we’re going to look at here today is Disney ( NYSE:DIS ). They reported earnings after the bell. You can see on the weekly chart what’s happening. The stock is now down to a new 52-week low. It hasn’t seen this level since 2014. So we’ll look at the daily chart. It’s not too bad here. Maybe $88.00 is going to hold. This is what I would tell you about Disney ( NYSE:DIS ): This is actually a pretty easy analysis to go through. It’s in a downtrend, that’s it. Buying these when the stock is close enough to the support line has been profitable to buy. Okay, great! But not by much because the stock has just essentially drifted sideways.
You get a nice move there, but generally speaking, and I’m just approximating here, the stock is kind of drifting sideways and maybe you make a little money. So here the stock is down, once again it’s right down at this downtrend support line. Gun to head, I would probably buy some stock tomorrow at around $88.00, and I’d probably sell it at 89.00 or 90.00. The stock is in a downtrend and you have to assume that the downtrend is in tact up until the time that it’s not. Right now the downtrend is still intact. If you’re selling at the open you’ll be selling with everybody else. Because that’s what happens. I would be looking to buy this stock ONLY, and here’s really the trade, only if the stock is ABOVE the opening print, say 2, 3, or 4 minutes in. If it’s above the opening print then you can buy this stock, and only then for a quick trade. Because again, the trend is down, you can see it.
3 Stocks I Saw on TV Free Chart