Riding the trend isn’t enough. You’ve got to get on board at the right time. Check out Netease.com (NTES) (July 01, 2016)
NTES
I want to look at NetEase ( NASDAQ:NTES ) in this Free video. Here’s the deal: This is a weekly chart of NetEase ( NASDAQ:NTES ), the trend is pretty obvious, however you want to draw the line here. So the trend is just obvious. But the thing is, within this trend you’ve got to look a support and resistance. This was a big resistance line here, that was the following support line right here, so this is the trading box. If you’re waiting to buy, “Well, I want to make sure that this resistance is going to be cleared,” so then you’re buying here. Great! And you’re making a little bit of money, but not the money you could have made if you had instead looked at the overall trend and said, “Okay, I want to be long this stock, but I can’t buy it at any given time.” I like the uptrend; ultimately, if you bought anywhere along this chart, except right at the very, very top here, if you bought anywhere here you’re making money. But if you’re instead finding the trend, drawing just basic lines along the tops, basic lines, it’s no exact science along the bottoms. Okay, I want to be buying, where do I buy?
What I’m saying is, this isn’t the place. We’re testing this last resistance level here. Now last time this was resistance, finally we broke through. so that was a successful test and then it goes on to do what it does. Well now we’re back here again to test this level but lets look at the daily chart. By the way, this red line here is the 40-week or the 200-day moving average. This is the black line here, this is the same thing, the 200-day moving average. So if you were looking at this stock, even on Wednesday, it’s breaking out of a squeeze, I remember talking about this, but you’ve got to be paying attention to these levels. So even if this is breaking out of a squeeze, this could go a lot higher because it’s above here. You have to to look back in time and see where this last high was. And the last high is just barely where this was, “Oh okay, well great. So we eclipsed it, dang it I should have bought yesterday.”
Not so fast. Remember you look at the weekly chart and you know what that looks like. Here’s the 200-day moving average. You’re best buy points are clear down there, that’s 25 percent below where it is now. Well, ultimately you’re going to get a chance to buy it at the 200-day moving average; it’s only a question of time. But for now what you want to do is, be happy that you didn’t buy it on the new high, just reflexively,”Oh it’s making a new high NetEase ( NASDAQ:NTES ) is going to the moon.” It may very well be, but I think before it’s going to do that you’re going to get a better opportunity to buy this thing down at the lower end of the zigzags here. Probably not quite that low, but somewhere around the 170.00 mark. So save yourself 14.00 or $15.00. Look for this stock to pullback around 170.00ish and the at least you know that: (1) you’re buying an uptrending stock; (2) you’re not buying it at the all-time high.
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