Here’s your trade on Tractor Supply Company (TSCO) (August 04, 2016)
TS
I want to look at Tractor Supply Company ( NASDAQ:TSCO ) and here’s why: The stock is just absolutely getting crushed today, 5 percent. And frankly it’s kind of difficult to understand why. I’ve been looking for news, I get most of my news, or used the anyway, at Yahoo Finance, but they’ve mucked that thing up so much I don’t even go there anymore. The only thing I could find, as far as why this thing is down so much, is over on Benzinga actually, where an analyst actually reiterated (this is Oppenheimer), they reiterated an outperform rating. But it was kind of like mixed feelings, because apparently they met with management, and there’s like unusual weather, and erratic same store sales, and stuff like that.
So the bottom line is, the stock took a dump. If there is any other reason, definitely let me know. This is why I want to go over this stock though: If this is really what it is, is an analyst’s, not even a downgrade, but kind of like a tepid reiteration, then there is a potential for a trade. I’m not saying for anything more than a trade, but here’s how you do it: Here’s a 5-minute chart of Tractor Supply Company ( NASDAQ:TSCO ); right out of the gates this thing fell. I’m doing this even a little bit before the market closes, but now you’ve got a low back between 2 and 3:00 and the low is 85.78. That is not even a percent below where the stock is trading now. And so you’re looking at this, and see this big decline.
Now what’s the one thing that traders are not going to want to do? They are not going to want to want to buy this thing today because it just looks so horrible. But what OFTEN happens, not always by any means, but what OFTEN happens is, on a really, really crappy day like today, the next day brings some upside, brings an oversold bounce. So that’s one way that you can trade this, just buy the thing, expect for an oversold bounce to occur and then sell into it, and make a couple of dollars. But if you look at this longer-term, the stock has been trading sideways for quite a while, but this is a key break, there’s no way around it. I want you to think about it this way: If there WAS demand for this stock there are ready, willing and able buyers, if they can only get their price. They’re waiting, it’s called support. If there was demand for this stock at this level, then it wouldn’t do that.
So what this breakdown here revels is (and it’s intuitively obvious once I say it), what this break here revels is, there is some kind of difference between where this stock was back here when buyers DID come into grab this, and this was after earnings, and now. And could it be, but it’s just simply a lower high. Technically, this stock is busted. Lower high, now we get a breakdown here. Honestly, and I’ve liked Tractor Supply ( NASDAQ:TSCO ) for a long time, I sure don’t now (I don’t own any of it). I don’t like it now because this is a key break. If you’re looking for a trade then perhaps tomorrow morning you’ll get a little move to the upside. But for a real good perspective you really need to zoom out and you get this kind of Magic Mountain roller coaster. Not where you want to be.
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