3 Stocks I Saw on TV (SHAK BUFF CHK) (August 10, 2016)
Every night we watch the same shows, Fast Money and Mad Money, and we want to USE those ideas the grow OUR money. Well good trading takes more than just pushing the buy button, every morning, to get the stocks you saw on TV last night into your portfolio (man that’s a mouthful). I’m here to help you make money on THESE 3 stocks I saw on TV.
We’re going to talk about Shake Shack ( NYSE:SHAK ), which again, I’ve never eaten there but I’m sure but I’m sure their shakes are ‘shackalicious’. The company reported earnings, they weren’t that great, as you can see. So what happened to the stock? Lets look at it after hours. Huge decline right away. Well, it looks TO ME like the price level for this stock, where everybody seems to be comfortable with it, is around this area, below 37.50, between 37.50 and 37.00. So lets assume that the stock opens up at this level tomorrow. My bet is, after this kind of sell-off, the stock is down about 8 percent or so, you will probably see a little bit of a bounce. You could PROBABLY, and I’m not a fortune teller, but you could probably buy this stock at the open on Thursday and make some money. You just have to have a tight stop on it, because if the stock continues fall, and we’ve seen stocks like this, where they gap down on bad earnings, and man, it just gets worse and worse.
So don’t just buy this stock because old Dan Fitzpatrick says you probably could make some money. I’m saying, if the stock is down this low and it starts showing some kind of support, I would just say this, you go ahead and buy the stock as long as it is ABOVE the opening print. If it’s BELOW the opening print then you know that the stock opened up and has met with even more selling. You don’t want to be the guy taking those traders out of their bad trades. Stand aside. Let somebody else catch that knife. But if the stock is trading above the opening print then sure, buy some stock, it’s a day trade. But what about other than that? I look at this and the stock sure has had potential, a nice long base, its IPO, you can see what’s happened here, I don’t need to describe it, but it’s been in a pretty long base basically for this year, for 2016. I think this pullback, all this does, frankly, is perpetuate the base. That’s it.
I saw some negative down talk on CNBC about it, after hours, and I get that. But I really don’t care so much about the fundamentals or whether Shake Shack ( NYSE:SHAK ) gets their customers or this or that. Though I have to tell you, this company knows who it’s customers are. Every company knows who it’s customers are. It seems a little bit ‘hubiristic’ (I don’t know if that’s a word but if it’s not it should be) to be saying that the company doesn’t get who it’s customers are. They built their business on knowing their customers. But what we’re seeing here is, lets look and see the stock and lets see what the buyers and sellers are doing.
If the buyers and sellers, our customers, stop the stock right here, all this is doing is perpetuating this sideways channel. Let it go. If the stock THEN, and I’m not talking tomorrow, I’m talking next week, two weeks from now, whatever. If the stock starts trading back above the 50 and the 200-day moving average then this base, that I say is being perpetuated, is actually starting to become an uptrend of higher highs and higher lows. But we’ve got to wait for that. We don’t know whether that’s going to happen. I’m just drawing the ‘maybe kinda sorta’ mights in the future. So that’s my deal on Shake Shack ( NYSE:SHAK ).
Now Blue Buffalo ( NASDAQ:BUFF ). My dog Tonya’s favorite stock (as she gets older she does like PetMeds more and more). The company reports earnings, it’s up after hours. This is a little different. I would actually look to buy this stock in the morning. Although I’ll say it again, as long as the stock is above the opening print there too. Because see these stocks kind of ‘gap and crap’ a little bit (see my Chart of the Day video on JD.com in that respect). So as long as the stock stays above it’s opening print then you’ve got to look at this as a volatility squeeze that’s starting to play out.
And then the last one we’ve going to look at here is Chesapeake ( NYSE:CHK ). The company reported earnings after hours. It’s up a bit. I don’t get too lathered up about this. It’s up 5 percent and that’s great if you bought and held it over earnings, but the stock is still range bound. The reason it’s going up is because they reported that they’re selling this area in Texas called the Barnett Shale area. Forget about, “Oh, that’s worthless,” that’s not what we’re talking about. It’ improving their balance sheet. These guys have had a lot of debt, a lot of issues, which is why they’ve been below $5.00, which is something that drives and CEO crazy. So they’re improving their liquidity, their balance sheet, that’s why the stock is up. I think this is a stock that you can buy right here.