Did CVS ($CVS) and Walgreens ($WBA) work out for you on the last slam play? Here’s the next one on Synaptics ($SYNA). (March 18, 2019)
SYNA CVS WBA SYNA
I want to look at Synaptics ( NASDAQ: SYNA ) here. This thing absolutely got the snot beat out of it with an ugly stick that had nails sticking out of the end; really bad. It was down 22, almost 23 percent. The CEO leaves, the company lowers guidance. If we just look at the Bollinger Bands, it’s like it’s not even fair, 3 standard derivations; the stock is still down well below 3 standard deviations. So basically it’s against the law for the stock to be down this far away from the mean here. So this is a very, very high probability trade, in my view, to snap back to have a good rebound. I covered this just a week ago or so ago.
CVS ( NYSE: CVS ) gave us the same kind of thing, this was in the Chart of the Day. This wasn’t even as severe but you could see it was a pretty nasty sell-off. So my suggestion was, buy it when it surpasses this high. Keep a stop just below this low and you should make some money, and traders did.
Walgreens ( NASDAQ: WBA ) gave you the same exact thing; the same exact move. This was the bottom, you set your stop just below that low; ride it up. It’s 5 percent but 5 percent in 6, 7, 8 days, I will take that every 6, 7, 8 days, no question about it. We are swing trading here guys
With Synaptics ( NASDAQ: SYNA ) what’s the trade? The trade is that we key off of the close. The stock closed at 33.46. Already, even after hours, it is trading up just a slight bit. Your trade here is this; you only buy the stock above 33.46 and then you put your stop slightly below the low of 33.32; so you could put your stop at 33.30 and you’ve got a 16-cent risk, basically no risk at all.
So I am looking at this and I see that it is a high probability trade; just because, statistically, the stock has to come up. And it is a low-risk trade because you can define your risk base on the low of the day, which is right here. I believe it was during the early afternoon, whenever it was, it doesn’t matter; the stock closed very, very near the low of the day. That tells you that the only reason that the stock closed at 33.46 was because the closing bell rang. They were selling this dog all the way into the close. That is why I say you want to wait for the stock to trade ABOVE 33.46; we could see another round of selling tomorrow morning before the stock ultimately turns around.
What we want to do is trade some type of turnaround. We want to see that there is enough aggressive demand to push the stock ABOVE the close here in order to basically relieve the pressure on the stock and let the stock come up a little bit. I look at Synaptics ( NASDAQ: SYNA ) as a pretty good high probability, low-risk swing trade for tomorrow.
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