3 Stocks I Saw on TV: GOOGL, SBUX, MSFT. (April 21, 2016)
Every night we watch the same shows, Fast Money and Mad Money. And we want to use those ideas to grow our money, right? Well good trading takes more than pushing the buy button every morning on stocks you saw last night. I’m here to help you make money on these 3 stocks I saw on TV.
A lot of ugly in this video. First of all, Google ( NASDAQ:GOOGL ). They missed earnings. Not a good thing. They were estimated at about $8.00 a share, give or take a few cents. They came in at 7.40. Not a good day. The stock has gapped down, I was checking it last time it was like 4 percent, it’s over 5 now. If you held over earnings, hoping for the big pop, well, good for you. You gambled, you gambled wrong. It doesn’t work that way. I mentioned a few days ago, that if you wanted to hold Google ( NASDAQ:GOOGL ) over earnings, then your plan should be to take a partial position, we’re just going back to that plan. Your plan should be to take a partial position, a SMALL position, such that if the stock tanked you would actually be HAPPY about it. Because now you could take a bigger position; you could buy more shares at a lower price.
That WAS your plan if you want to hold the stock over earnings, that you HAD to account for the downside. You had to account for the possibility that the company may miss. Because the problem is, this is just trading psychology, if you decide, “Okay, I’m going to get into Google, because I’ve got a feeling, I see this pattern here, and this thing is going to pop and it’s going to go up to $900.00. I’m going to make a gang of money.” If you’re in big on that, then when Google ( NASDAQ:GOOGL ) does what it’s doing now, now you’re freaking out. And you literally sell down here. You bought here, “Oh crap! The stock’s going the wrong way. I’ve got to sell before I lose more money.” Well, what you’re not thinking is, you’ve already lost a boatload of money because you took a big position. GAMBLING, yes it was. Gambling on an upside move.
Instead, Google ( NASDAQ:GOOGL ) comes down, now you don’t know what to do. You’re kind of screwed. But instead, if you’re taking a partial position here, with a plan to either add more, if the stock moves higher then you’re glad you had a little bit anyway. If the stock moves lower you also add more, because you’re glad you just had a little bit. And by the way, you can also now, if you were long this stock prior to earnings, you are making a decision from a relative position of strength. Because you only have a little bit, you don’t have to buy down here, maybe you’re looking at the numbers. Maybe you’re looking at what they’re saying and you’re deciding, “You know what? I don’t think I want to buy more. I think I’ll just hold on to what I have and let this thing play out.” So you have a lot more options when you take a smaller position and that goes upside down. You have a lot more options.
When you have a big position and it goes upside down, how many languages can you say, “Oh crap!” in? So now what do you do if you don’t own Google ( NASDAQ:GOOGL )? One way you can trade this is, you can trade a snapback, “Oh the stock’s down over 5 percent. I’ll buy it first thing in the morning. As long as it stays above the opening print. As long as it stays above there, then I’m okay.” You could go ahead and make that trade if you want. But I’m telling you, if the stock gaps down and then keeps going, you don’t want to be long the stock. So far though, if this is where it stops is $740.00 or so, then for a trade, sure. But for a longer-term investment, just consider this, and consider it well, this stock is still just right in the middle of the trading range.
Okay, lets move on to Starbucks ( NASDAQ:SBUX ). They missed too. A tough environment for the coffee drinkers. This is now below the 200-day moving average. Maybe you’re going to get a little snapback here, but just because a stock gaps down 4 or 5 percent, doesn’t mean that it’s always going to reverse, because it doesn’t. A lot of times they just kind of keep going. With Starbucks ( NASDAQ:SBUX ), I think this is you’re signal to exit. The reason, from a technical standpoint, that you would be long this stock, is because you’re expecting the stock to do what it’s done before. Move up, a rest, although this was a heck of a rest. And then a move down, a rest. And then start the next leg up. Well it’s not doing that. So for the time being, I don’t see there’s any reason to be owning Starbucks ( NASDAQ:SBUX ). And also, keep something in mind, this is a pretty mature company. This isn’t exactly a high growth stock anymore. They’re still growing, but for crying out loud the stock went from 40 cents up to $60.00. At some point you’ve got to say the stock is maybe mature. So don’t be expecting too many things from Starbucks ( NASDAQ:SBUX ), because it’s sure not giving them to you this last quarter.
And then the last one is (I told you there would be a lot of ugly in this video, and I’m not even showing you my face), Microsoft ( NASDAQ:MSFT ), also a pullback. Microsoft ( NASDAQ:MSFT ) may be, this may be a good opportunity to buy the stock. It pays not that great of a dividend, but it’s a dividend. But also, Microsoft ( NASDAQ:MSFT ) has been growing. It’s a stock that I’ll tell you one thing, I sure as heck hate Windows. But I hate Apple’s operating system too. So basically I’m an old guy that would just like somebody else to do all my computer work for me. But Microsoft ( NASDAQ:MSFT ) is doing well. I have a tablet, do you? I think that this is a stock that you can buy on a dip. If it falls below the 50-day moving average I wouldn’t be long the stock. But if it stays above the 50-day moving average, I think I’d be in.
3 Stocks I Saw on TV Free Chart