3 Stocks I Saw onTV: GLD, HAS, MAT (February 12, 2016)
GLD MAT HAS MAT HAS
Every day we’re watching CNBC to see what the tickers are that we’re going to be trading. You’ve got the Opening Bell, Power Lunch, Closing Bell, Fast Money, Mad Money. A lot of stocks in the headlines. A lot of stocks in the headlines. Well I look at CNBC all day as well. What I’m doing now is, I’m looking at 3 stocks that I saw on TV, and I’m going to tell you what you probably didn’t hear on TV.
Today we’re going to start with Gold ( NYSEARCA:GLD ). Now here’s the deal: Look at the weekly chart, this thing has been moving up. Gold really, really made a huge move over the last couple of weeks, DIFFERENT than these prior moves. This time it got above the 200-day moving average, we’ve seen that a few time before. But this has been on massive volume, spiky volume. Now, a couple things, this could very well be a blow off top, where you just get this massive amount of enthusiasm and then that’s it, the thing goes parabolic and then comes crashing down to earth. I really don’t think that’s the case here. First of all, what happened on Thursday? A couple things. Mark Cuban was on CNBC and he said that he had bought a bunch of out of the money, these are higher strike price, out of the money calls on GLD ( NYSEARCA:GLD ) and so that was a real bullish thing for the market because hey, Mark Cuban, Dallas Mavericks, NBA title, private jet. What’s not to like? He sold Broadcast.com to Microsoft way back in the day, became an instant billionaire. Who doesn’t want to be a billionaire? So I’m listening to Mark Cuban, you think, “Okay, I’m in on that.” Well even a couple days before that, I think it was here, and by the way, this chart looks a lot like the chart that I’m going to be showing you in just a second.
Dennis Gartman had said that he turned bullish of gold, as he likes to say. Well, Dennis Gartman isn’t exactly the best market timer in the world, though I’m sure he would beg to differ, and that’s okay, there’s two sides to every trade. But, he was ultimately right about this one. It traded down just one day and that’s when all the naysayers would say, “There goes Gartman, top ticking the market again.” Well not so much, because then this following day we regain that and then we’re clear up here. So Gartman, good call, actually not even really late. But now we get this pullback. This is the thing, I think Gold ( NYSEARCA:GLD) ultimately goes higher. It’s in DESPERATE need of a rest, desperate need of a rest. But if you’re looking at just basic technical analysis, this is what you get; you’re getting this breakaway gap here. Comes out of this sideways consolidation pattern. It effectively kind of breaks through this last high. So this is a breakaway gap. Not used to seeing these other gaps, what’s called a continuation gap, occur just three days after a breakaway gap. But this is really what we’re seeing now. The next phase of the gap sequence will be, at some point at higher prices, what’s called an exhaustion gap. So lets say it happens here and I’m not saying that it will. You’ll literally have to see a gap. If this gaps up and then trades above there, that’s when you want to be selling into this. So frankly, you’re late getting in but there’s probably more upside here to go on Gold ( NYSEARCA:GLD).
Okay, lets go to the toy industry. Here’s the thing: Cramer had the CEO of a private company called Moose Toys on Mad Money on Friday. So okay, I can’t trade Moose Toys so I’m looking at two of my favorite toy companies (other than Tesla), I’m looking at Mattell ( NASDAQ:MAT ) and Hasbro ( NASDAQ:HAS ). These things, I don’t know about Moose Toys, but both of these things work. First of all Mattell ( NASDAQ:MAT ): You can see a nasty downtrend for what, a couple years. Well that’s reversed into an uptrend. Look at this huge volume here, big, major volume on this day. Buying it right up here was not the thing to do. It came out of a volatility squeeze, this is what I call phase one. Phase two is the pullback, that really ended on Thursday. Now this is giving you a second bite at the apple. I would be buying Mattell ( NASDAQ:MAT ) right here, with a little stop right below 29.00 or so.
Now how about Hasbro ( NASDAQ:HAS )? Hasbro ( NASDAQ:HAS ) doesn’t have the trend that Mattell ( NASDAQ:MAT ) has here coming out, but it’s also a fairly constructive pattern. Look at the weekly chart, this has been consolidating. A little bit of a downtrend for quite some time. So what are we doing? This is the ultimate support for this at 65.00. You look at this at 70.00, right now. So you’re buying at about almost 8 percent ABOVE where you would want to be stopped out if the stock does pull back. You don’t want to be holding it if it falls below 65.00. So what’s your trade here? Well, we’ve got resistance right up ahead so that doesn’t really work too well. This is what I would suggest doing: Take half a position, take a small position right here. Keep a really tight stop. If the stock falls down you’ve only lost a couple bucks, actually not even that. So you take your risk, small little loss and that’s it. Too bad so sad, live to trade another day. If, however, the stock holds above here and starts moving up again, then you’re taking even move stock at about 71.00, 72.00, so you’ve got a winning trade going into this level. You’ve got a winning trade coming into 75.00. moving above the 200-day moving average. You’ve got a nice cost basis as this stock just comes up to test this resistance level. Then what do you do when the stock does come up to test that resistance level? Say it’s up around here, now you’re protecting your gains. You’ve got a gain coming up here so then you’re setting a stop a little bit below the 200-day moving average. So you’ve got the trade going. Low risk on the entry. Extend you’re exposure a little bit here. As the stock comes up to test this resistance you’ve got a nice trade going. Maybe if it pulls back you take half off the table for a profit. If it keeps coming you take the other half off the table for a profit. So you have essentially done a channel trade. On the other hand if the stock doesn’t pull back you just hold this position and ride it on to glory.
That’s Hasbro ( NASDAQ:HAS ). That’s Mattell ( NASDAQ:MAT ). That’s Gold ( NYSEARCA:GLD). Those are 3 Stocks I Saw on TV.
3 Stocks I Saw on TV Free Chart