3 Stocks I Saw on TV: TSLA, SCTY, AAPL (February 16, 2016)

by DAN TSLA SCTY AAPL 
Every day we do the same thing if we’re hardcore traders, we turn on CNBC, we see the Opening Bell, we see Squawk Box, Fast Money, Mad Money, Power Lunch, you name it, there’s a boatload of stocks on there. What I’m doing in this series of videos is, I’m narrowing it down to 3 that I think you need to be focused on. Today we’re going to be looking at Tesla ( NASDAQ:TSLA ), SolarCity ( NASDAQ:SCTY), and then Apple ( NASDAQ:AAPL ).

First of all Tesla ( NASDAQ:TSLA ). This stock was up BIG today, the big reason was because SolarCity ( NASDAQ:SCTY), which is basically owned by Elon Musk (he owns a boatload of shares, we’ll get to that in a minute), chose Tesla ( NASDAQ:TSLA ) to provide batteries to enable SolarCity’s ( NASDAQ:SCTY) equipment to provide solar energy at night. Rechargeable batteries during the day, spit out the energy at night. So that was a big win for Tesla ( NASDAQ:TSLA ). Okay, two things, well maybe more than two, we’ll see. First of all, the stock really accelerated today. Yesterday I was looking at this and I think I probably even mentioned in our Stock Market Mentor Strategy Session, that it’s a little “wedgey” here, a little “bearish wedgey” here, where the stock had been oversold and higher intraday highs and higher intraday lows but they are kind of converging and that’s typically something that leads to the downside. Well that was yesterday, now we look at this today and that pattern has essentially been broken. Volume is actually heavier today than it was yesterday. I’m not really going to say this is a short squeeze per se, there’s a fairly decent short interest on the stock you can see here it’s about 7 1/2 days to cover. But what I really think is happening here is, the company reported guidance in it’s last earnings.

They lost a boatload of money, but what else is new? It’s Tesla ( NASDAQ:TSLA ), that’s what they do, lose money. But the stock was deeply oversold and I think, frankly, it just caught a lot of people leaning the wrong way. So you’ve got kind of a natural bid for the stock just because of the deeply oversold level, 140.00 support, “Oh my gosh it cant’s go up.” Well it’s going up again. So we’re getting this snapback rally, this is a technical thing. Today this news, to be perfectly blunt, I don’t think it’s really going to amount to much. I think a lot of this is already priced into the stock. This deal with SolarCity ( NASDAQ:SCTY), guys, this is a car company, I know it’s electric, I know they make batteries, it’s not a battery company it’s a car company. So ultimately the shelf life on this is going to be probably not too long. But enjoy this while it lasts. Right now, and it did catch me off guard here, right now I would look at about 180.00 as a price target on this. If it starts to hit that level then the oversold stuff is kind of done so you want to start using some pretty tight stops. By the way, that’s really how you trade this market is with tight stops. It’s super volatile, embrace the horror, that’s what it is, so just trade it with some tight stops. You’re never going to catch it all but you stay on the right side of the trend and then just prepare to be wrong by moving your stops up along with the price. And when you’re taken out, you’re taken out.

SolarCity ( NASDAQ:SCTY). This thing popped, the news that I found was because Elon Musk bought a bunch of shares but low and behold he bought them at higher prices, anywhere from 40.00 down to 25.00. So it hadn’t really worked out too well for Elon but being the billionaire that he is I don’t really think he’s losing any sleep. But I’m looking at this stock now and I think that it’s a buy. This is a zigzaggy pattern, very oversold here on the weekly chart down at $17.00. At Option Market Mentor we actually got a covered call trade going on this, where we bought the stock and then we sold a call against that. That gives us a lower cost basis, about $18.50, something like that, so I think that trade is going to work out okay. But the way this traded in the afternoon, lets look at a 15-minute chart, you can see it was up into the early afternoon and then just kind of tailed off. The uptrend is still intact. I don’t think this sell-off right at the end of the day is a real big deal. But I think it IS a deal, it’s a deal that you want to watch. Buy this on any weakness. If you’re long this stock and nervous, you know what? Sell it into any strength. Seriously, it’s that kind of market.

Okay, Apple ( NASDAQ:AAPL ). I’ve been mentioning the last few days that I think this is a buy. I don’t like to call tops and bottoms. Tops are actually much easier to call on a stock like this, where you see a triple top. Bottoms are more problematic, at least right now because I don’t think this is one. You look at the weekly chart, this just looks like a little slide, but on a short-term basis I think 90.00, 92.00, $93.00 is a good support level. I think you can be long this stock. I think you can be buying it here. And by the way, you buy it here, you’ve got about a 10 percent stop, a little bit below $90.00. If the stock FALLS that far it’s probably going to move lower, and that’s just the way you trade Apple ( NASDAQ:AAPL ). The big news today is that the government is asking Apple ( NASDAQ:AAPL ) to unlock the iPhone that ‘Jihadi John’ jerk and his wonderful girlfriend, who shot all those people in San Bernardino, used. That is a real complex issue, I’m digressing here a little bit but that’s what I do. My second favorite job, other than the one I have here. was suing the federal government for Pacific Legal Foundation, so I’m REALLY against government coercion of private businesses.

All I will say on that is, this is a really kind of a close call. It’s problematic for a lot of different reasons, one of which is that what the government has been basically doing is trying to turn in some Apple employees, no other way to say it, into slaves, into employees because they’re forcing them to do something that they don’t want to do. That’s one argument. There’s national security issues, there’s a boatload of issues in that whole deal. And so all I’m saying is, it is a tough call, tough situation, we’ll see how that plays out. I don’t think presidential candidates should be talking about it though. Since I’m not a presidential candidate, I can talk about it. But there’s a lot of stuff going on in the media about, “Oh they should do this, they should do that.” I’m just saying this, frankly, I know a lot about the constitution, I know a lot about this type of thing and I’m telling you this is a little bit of a head scratcher. It’s nothing that has been faced before so lets just leave that out of it, which I can do, because I’m the one that raised the issue to begin with, and just trade Apple ( NASDAQ:AAPL ). Look at about 92.00, $93.00 as support. If the stock falls down below 90.00 ditch this thing and figure it out with another stock.

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