3 Stocks I Saw On TV: TSLA, C, MS (March 15, 2016)
TSLA C MS
Every night we watch the same shows, Fast Money and Mad Money, and we want to use THOSE ideas to GROW OUR money; we want to make some money. Well look, good trading takes more than just punching the buy button on the stock you heard last night right after the opening bell. I want to look at these 3 stocks that I saw on TV today and lets see if we can make some money.
First up, Tesla ( NASDAQ:TSLA ). Cramer took this as part of a question and answer, somebody was asking him about this. He basically said, “Look, I can’t get behind this stock. I don’t get it, I don’t understand the valuation, but I’m not going to stand in the way of the buyers, because the stock just really trades strong.” Okay, that was his take on Fast Money; they were doing a fakeout versus a breakout and they all basically said Tesla ( NASDAQ:TSLA ) was a fakeout. So the sentiment, among the guys on the desk anyway, it’s kind of negative on this. That makes me wonder about perhaps taking the other side. I AGREE that this stock has moved up quite a bit. I’m telling you, if you were long the whole time, great. Just know this: This is where resistance lies. You move this out to here, you can see this is just getting into the danger zone, but it’s done it before.
So here’s my suggestion: I can’t buy this stock right now either. It’s just pushing right up against 220.00, which is an obvious resistance level. This is the 200-day moving average, that’s also an obvious resistance level, which held it back several times. It’s also moved up from 145.00 up to 215.00. That’s been a heck of a move. So there are a lot of things to not like about this stock if you’re entering, if you’re just looking to buy. I can’t buy it here. If you want to go ahead and do that, fine. But do this too: Take a moving average, make it like an 8-period moving average and protect your profits that way. If this stock starts falling below, like right now the 8-period moving average, that level is 205.00. So if the stock starts falling $10.00 below this 8-period moving average, which is basically defined support with a little bit of room. If it starts falling below 205.00, then go ahead and ditch it. That’s how I would trade Tesla ( NASDAQ:TSLA ). Would I short it? Absolutely not. Though I actually have shorted it before in the way of bear call spreads with varying degree of success (full disclosure), or failure. Tough stock to trade. So that’s it for Tesla ( NASDAQ:TSLA ).
Now lets look at a couple things that Carter Worth was checking out on Fast Money. Here’s what he was looking at in the financial sector, Citigroup ( NYSE:C ). Left shoulder, head, right shoulder, neckline. Kind of a classic upside down head and shoulder pattern. So if this is at $35.00 and this high is about 42.00, that’s, $7.00. So you take that $7.00, the distance between the low and where this neckline is, which just simply connects these two things, if you take that $7.00 add it to 42.00 you get the target of $49.00. That’s the way that I would be trading Citigroup ( NYSE:C ). Now he was actually looking at it on a 30-minute chart and was seeing the same thing. Honestly, I just don’t think you have to do that. I don’t trade in 30-minute charts, I trade in daytime periods, so I don’t think you need to see that.
The other stock that he was looking at is Morgan Sanley ( NYSE:MS ), and guess what? There’s the head, there’s the left shoulder, and you can look at this as the right shoulder, or you can even look at this as the right shoulder. I just don’t think it matters. It does matter in terms of the slope of the neckline, because if this the right shoulder, this is the left shoulder, then you have to look at this as being the intermediate point, and this as being the intermediate point. So you set these two points as the neckline. Go from 21.00 and up to, we’ll say, 25.00, so you’ve got a 4 point move. But then, as far as measuring where you’re going to go, you have to start at where the breakout was, which we’ll say that’s 24.00, whatever. So that’s your neckline, that’s your targeted move, right about 29.00. Now on the other hand, if you do it this way, which is I think the correct method, and look, at the end of the day all we’re doing here is managing the risk, we’re not doing ANYTHING else. That’s the neckline there, so now we go from 21.00 up to 26.00 or so, that’s 5 points and we don’t even have the breakout yet. So if the stock breaks out above 26.00, now you add 5 points to that and you get 31.00. I like that better, I like having a $31.00 price target on a $26.00 stock. That’s the way I would trade Morgan Sanley ( NYSE:MS ). That’s the way I would trade Citigroup ( NYSE:C ), same thing, okay?
3 Stocks I Saw on TV Free Chart