Looking for a new trading theme? Here’s a Country ETF for you. (July 13, 2016)
SWH PM RAI TSCO DE CAT COW POT COW MOO CAT MOO POT MOS POT MOS
This is going to be a little different Free Chart of the Day; this is like 11 different stocks I’m going to cover. And this is why: It comes from our forum today. Somebody said, “Hey Dan, I have an idea for a Sector Spotlight.” Because on our Weekend Update one of the things I do is focus on a different sector every week, so we can see where the money is going and make sure we’re there early, so we do that. So the question was, “Can we maybe do a country Sector Spotlight?” What the person was referring to of course was Japan, Brazil, this or that. But I’m going like, “A country ETF, I don’t know that much about different countries, but I know what I’ll do instead.” So here’s a country ETF. If you’re from the country, you’ll know what I’m talking about.
First of all, Smith & Wesson ( NASDAQ:SWHC ). Nice uptrend. They don’t report earnings until late August, but this is not in a good buy point right now. I’m talking about the STOCK, not the guns. The guns are good. This COULD be kind of a double top, and you have to look at it, respect the uptrend, but think, what’s the next catalyst from here, from 28.42, what’s the next catalyst to push this thing to new highs? And if it does kind of swing to new highs, would it be so far above, just from where it’s been trading, so far above the 200-day moving average that there’s not that much juice in it before it would stall out?
So my suggestion here on this is, wait for the stock to either REST some, or pullback, OR breakout, and then you want to take it for a quick trade. That sounds like, “So what you’re saying is, if it goes up, down, or sideways, buy.” Not really. They’re just different tactics for the same stock. The thing is, if the stock breaks out from here I just don’t think it’s going to move that much before the move peters out. Because it started down here, so the thing is already up 30 percent in not too very long. So I would just kind of stay away from Smith & Wesson ( NASDAQ:SWHC ) right now, unless it comes back to a good buy point. And it’s guns, so these days they’re always going to do well.
So we’ve got the guns, now how about the tobacco? Philip Morris ( NYSE:PM ), this was my suggestion: It’s got almost a 4 percent yield. They report earnings on Tuesday. Another option is Reynolds American ( NYSE:RAI ), which I think it’s a good entry here. Either one of those works. I like the dividend yield better on Philip Morris ( NYSE:PM ). Money managers are buying this stuff, because it pays good dividends. And these days, thanks to Janet Yellen, Ben Bernanke, etcetera, it’s hard to get a good fixed income. So those work.
Ford ( NYSE:F ). You’ve got to have a Ford F150 pickup. This is just in a downtrend. I wouldn’t be wanting to buy this until the stock starts printing higher highs and higher lows. This is the 200-day moving average here, so what it has to start doing is this: Seriously, if you’re looking at this chart, and listen to me, I’m giving you pearls, if you look at this chart and see anything BULLISH about this, then you already own the stock and you’re not objective. Because there is NOTHING bullish about this. Now, you can say, “Oh, well this is a higher low relative to that one.” Sure, that’s fine. But the trend is still down. There’s going to be high lows, that was a higher low and then this was a lower low still. You can even get this move up here. Great, that’s a possibility, but we still don’t have a SERIES of trading cycles that tell us that the stock is done going down, we just don’t see it. So Ford F150s, that’s not working.
Now, Tractor Supply Company ( NASDAQ:TSCO ), I love this stock. This is where I get all my lawn mowers, the riding ones. This one I like. They report earnings on the 20th, so it’s right around the corner. But this is kind of what I would say, a new term for me, cup and ‘handley’. It’s way too long, it doesn’t really fit the description, but you kind of get the idea. A nice little bowl pattern here, and then what we’re looking for is a breakout. So I would want to wait on this untill the stock starts breaking out to here. And keep in mind, you compare this one, 50-day is above the 200-day, and the price is starting to push above the 50-day. That’s a little different than Ford ( NYSE:F ).
Okay now, you can’t have a country ETF without John Deere ( NYSE:DE ), Deere & Company. Zigzag, the good entry is right around here around $80.00, 3 percent dividend. I think this works okay, this would be more for a long-term hold, not for a trade, you can see it’s not really going there. But if you’re a country guy you want to be owning this stock more towards 80.00.
And then we can’t do without Caterpillar ( NYSE:CAT ). This is a different type of pattern here. The stock broke out above the 200-day moving average and now it’s in consolidation. So where are you going to buy this stock? I’ll wait, no longer, right down here. You want to wait for it to pullback, and it will. The Dow is extended. We’re going to get some weakness over the next few days. Caterpillar ( NYSE:CAT ) should come down. They report earnings on the 26th, but you’ve got to wait and have a better entry.
Now somebody mentioned this, COW, the livestock ETF, right? It’s pretty thin, 7,000 shares traded, so THAT’S not working, not working at all. If you want to buy some, fine. You’ll probably make some money, it will probably move up a bit. But look, I’ll put it this way, with 7,000 shares traded, if I pounded the table on this, I would move the stock and I don’t like to do that, I might do it anyway. You’re probably going to get close to $1.00 out of this.
Oh, wait a minute, I missed one, MOO ( NYSEARCA:MOO ), the agribusiness ETF. This isn’t too much thicker, it still trades well under 100,000 shares a day, but I looked at this and I kind of like the pattern. It looks a little bit like Caterpillar ( NYSE:CAT ). I’m looking at the individual holdings here, which you can get, and I spotted a couple. I’m not going to go through all of them, but I spotted a couple that I think work a heck of a lot better than the agribusiness ETF.
One of them is POT ( NYSE:POT ), probably not real popular in the South, in the country, but you never know, there’s guys in Berkeley that wear cowboy hats too, and in Denver. But here, this is potentially bullish. I will say, here, I can make this case. You keep a stop under this low, this is when earnings are due to be released, and look for this kind of move. So this is basically printing like a bullish wedge pattern, that’s really kind of the way I’d look at this. So I think you can go with POT ( NYSE:POT ) right now.
Another one is Mosaic ( NYSE:MOS ), similar type of pattern, very similar. Mosaic ( NYSE:MOS ) doesn’t report for a few more weeks, in early August. So either of these work. I think you’ve just got to just draw a line right across there, right down there. Boom! Wait for your breakout above the 200-day moving average.
Anyway, that’s my make up for a nice country ETF. Lets go get a cowboy hat on, some jeans, and go trading.
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