3 Stocks I Saw on TV: TWTR, VRX, AGN (April 05, 2016)
TWTR VRX AGN
Every day we watch the same shows on CNBC, Fast Money, Mad Money, all the stuff during the day. And we want to use the ideas that we get on those shows to make some money in our own portfolios. Good ideas on TV are great, you’ve got to put them in your portfolio to make some money. So, you’ve got to know how to make a trade on the ideas that you get. That’s what these videos are for, 3 Stocks I Saw on TV. Lets try to make some money on Twitter ( NYSE:TWTR ), Valeant Pharmaceuticals ( NYSE:VRX ), and Allergan ( NYSE:AGN ) today.
First of all Twitter ( NYSE:TWTR ). They were chatting it up on CNBC today about them getting the live stream rights from the NFL for this year. Okay, that’s great. So next year you can get Cam Newton doing the dab on your iPhone. Anyway, so what do we do with the stock? The stock actually traded down today, after a pretty good move yesterday. So does that mean this is a bad thing? No. The company reports earnings pretty soon. What I’m suggesting is, I think you can buy this stock now. It just has to stay above the 50-day moving average, just a little bit here. You don’t want to trade so precise, “Oh, the 50-day moving average is at 16.96 and the stock closed 9 cents above there. Wow!” No, this thing can come down a little bit. No problem with that. But generally speaking you want to see this staying around the 50-day moving average, with an upside bias. And if the stock starts trading above today’s high, which is the highest its been since early March. If it starts trading above this intraday high of 17.83, I think it’s on an earnings run, and you can go ahead and own that stock INTO earnings. Where it’s going in response to earnings? Hey, somebody knows, it just isn’t me. We have several weeks to hang onto this stuff before they report.
Okay, Valeant Pharmaceuticals ( NYSE:VRX ). What are we going to do with this? On Fast Money they were talking about it on the desk today. Karen Finerman kind of had the best analysis, which was, “I don’t know what the fundamentals are on this company.” There are so many things in a stage of flux. They’ve got to file their 10-K by April 29th, so that’s several weeks from now too. The stock is going to kind of be in limbo here.” And Adami said basically, “Look, this thing has a lot of headline risk and it’s all bad headline risk.” This is a stock that, seriously, if you trade this stock and you make money, you’ve got to admit it, you’re lucky. You’re not good. You’re lucky. You may be managing your risk, and that’s fine. You can make a case for doing whatever the heck you want to do with this stock, but you’re really lucky. I would just suggest this: If you’re buying this stock, know that $25.00 is where the bulls live. That’s the last stand, the last of the mohicans. If the stock starts trading below that $25.00, you don’t want to be long.
Now, what about being short? Great! You want to predict the next leg down you go ahead and do that. But the way this stock trades, from bottom to top here this is a 60 percent move here on this. And then you want to short this and you happen to get in at the bottom, well not that big a deal, 15 percent up to this top. But isn’t that enough to shake you out? What I’m saying is, this is a really volatile stock and I think the way to make money on this is actually really, really easy. You get a coin and you say, “Heads for long, tails for short,” and you flip the coin, and that’s your trade on Valeant Pharmaceuticals ( NYSE:VRX ). Or, you could not just trade at all, which would be my preference.
Now Allergan ( NYSE:AGN ). The government basically doesn’t like it when companies leave, and so they’ve got a big issue with these inversion rules. And so Allergan ( NYSE:AGN ) and Pfizer ( NYSE:PFE ), that deal looks like it’s probably not going to go through. If you are selling this stock now, frankly, I think you’re too late. How many times have we seen this, where some stock takes it in the shorts, by the shorts, on really, really bad news. And you look at it and you say, “Oh my gosh! I got to get out of this stock.” Well the time to get out of it was before this big move down. This company still has value, it’s just there is a whole different tax treatment. What is that value? Is that deal even go through or not? Seriously, nobody knows, but the market is kind of thinking it’s NOT. And so we look at the weekly chart; other than for a trade, look at here on a trade. I can make a case for the trade. Here’s what it is: As long as you respect this low, this “Oh crap, I got to get out of here low, of 226.43.”
And by the way lets look at that, that’s about what? Less than 5 percent below where the stock is now. If you put a stop BELOW this level and say, “My thesis for this. My hypothesis is, if this stock is going to bounce, and that’s what I think it’s going to do. It’s definitely going to stay above this level. If it’s not going to bounce, then guess what? I don’t want to be long.” So your ULTIMATE stop is down here. You buy this stock. You could even buy it on a move ABOVE Tuesday’s intraday high, which we will call 239.00. So you can buy the stock at 239.00, keep a stop right down there, and that’s your TRADE. Your short-term trade for Allergan ( NYSE:AGN ), with a defined risk. Now, long-term, seriously, you look at the weekly chart, I can’t look at this in the long-term as anything other than a stock to stay away from. It’s just rolling over, you could say, “The stock’s going to go to 200.00. The stock’s going to go to 100.00.” Who knows what it’s going to fall down to? Okay, it’s a drug company, and the bulls are on drugs here. So I would stay away from this long-term, too many unknowns; not a whole lot different than Valeant ( NYSE:VRX ) when it gets to the unknown category. Short-term, I would not be shorting this stock. I would only look to trade it to the long side and that’s for a ‘snapper’. In other words a snapback rally.
3 Stocks I Saw on TV Free Chart