Aw, Snap! Time to close down the trade on Snap, Inc. (SNAP) (August 24, 2017)
SNAP
Let’s take a quick look at Snap ( NYSE:SNAP ) here; or as I like to call it, Snaptwit, for every derogatory reason. Anyway, this trade is done. We made some pretty good money at Option Market Mentor just buying some speculative calls, $14.00 calls, a week ago or something like that. My entire idea on this was, even though the 50-day moving average hasn’t really been THAT relevant. Because the stock started trading in March and it takes a couple months and a half in order to get the 50-day moving average to even start kicking in as the stock trades more, and then it is rallying up here.
The 50-day moving average is going to kind of be a key level here. So unless there is some fundamental reason to be owning Snapchat ( NYSE:SNAP ), and I don’t think there is, then this is the time that you want to take this money off the table. Just take it off the table if you made this trade. I have covered this stock several times over the last couple weeks. What I am saying is, this is now going off the radar, or at least off the Chart of the Day or Stock Market Mentor radar, because the stock has run all the way to second base. Now it has got to turn the corner and probably come back the other way.
With Facebook ( NASDAQ:FB ), Instagram, all that jazz, you know the story, you are not getting a deal here on Snapchat ( NYSE:SNAP ). This is a stock that is a TRADABLE stock now, just trading on the extremes. But I think you ONLY trade on the extremes. The stock had gapped down here below the Bollinger Band, and then gapped down again, the following day, below the lower Bollinger Band. It has completely traversed up across the bands and was actually up ABOVE the upper band for three days in a row. Here, barely here, and then here.
This is a stock that you need to sell right now. Move out of it and wait for it to reset or look for something else. The lesson here, if there is one, is that you don’t want to fall in love with a stock. You want to have your targets thought about and determined before you even enter the trade. Because if you are not thinking about 15.00, maybe you are not even thinking about the 50-day moving average you are just looking at this. Well, you can be rooting this stock on all the way up to $17.00, $18.00, $19.00 just because you love the fact that you got it low here and you are going to ride this thing higher.
Well, that is not what a consistently profitable trader does. You may get lucky once in a while, but what you have done is fallen in love with the stock. You have fallen in love with your idea. Don’t do that. Pick your target BEFORE you enter a trade. And for us, it was always kind of $15.00. I was always hoping to get a LITTLE bit more out of it, and I guess we kind of did. But ultimately $15.00 is where the line in the sand was. That is where the bears said, “No! You are not going any higher”. I think this stock goes lower, you need to be out of there.
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