Our Dollar General ($DG) trade was good for a quick $2 bucks on Friday morning. Let’s look at YY, Inc ($YY) for a trade next week. (March 15, 2019)
DG YY
I want to look at our Dollar General ( NYSE: DG ) trade, which I laid out in this Free Video on Thursday night. The instruction was to wait for the stock to break above the high of 112.46, so we will say 112.50, and then go ahead and buy the stock; it showed that the selling was definitely done on Thursday. So what happens? The first thing on Thursday the stock was 112.46 so that printed the high right there, that was the high. Then the stock opens up on Friday and actually trades down.
The reason I am mentioning this is because a lot of times you will look at a trade like this, with that dragonfly doji pattern, you will look at a trade like this and then you won’t get an entry, the stock gaps up and just keeps going. But a lot of times too, you will see this kind of thing where initially the stock sells off a little bit. Don’t say, “Well, screw that, that’s not going to work” and then take the stock off your screen. Look at it, maybe set a price alert if you don’t have it set already, have your trading assistant, again, otherwise known as your trading platform with an alert, track that stock.
Here the stock starts trading up above 112.00 again, 112.25, something like that. Your attention is called back to it and then what happens? You could put a buy stop in, an automatic buy if the stock gets up to 112.50, that would be fine. But if I am at my desk I don’t like to hear that I have taken on a new position without me looking at it saying, “Yes, in fact, I actually do want to do that.” So just set an alert and have a note in there as well; then if your alert gets hit rather than sitting there wondering, Why am I getting this alert? You have a note there that says, Hey dummy, the stock is hitting a new high, buy, something like that.
Anyway, let’s assume that you get in here and then an hour, hour and a half later this is up almost $2.00; ultimately it did go up $2.00 above where our entry point would be. But the idea isn’t to top ticket on the sale. The idea is just to be trading stuff like this every day, when you can find it, and just treat it as extra income, whatever your metric is; maybe you are making $100.00, maybe you are making $500.00, maybe you are trading 1000 shares, I don’t know, that’s for you to decide. The idea, though is, you look at these setups like this and just look for a little bit of money every day. Hopefully, you will be getting more trades like that.
This is a different one here; I just wanted to show you this. YY ( NASDAQ: YY ), this is a stock that Cramer featured on Mad Money, I think it was on the 22nd here when I was talking about Chinese stocks. The stock is up pretty nicely since then, about 20 percent or so. I just wanted to point this out to you because the way this stock is moving it looks like it has got some really nice momentum and is now decisively above the 200-day moving average. You can say, Oh, well this is way below average volume. Guys, this is a 20-day moving average and we’ve got these 3 big massive days of volume. Let’s see what happens if we change this to 50; suddenly this stuff is all zeroed out and now we have got slightly heavier than average volume trading.
So be mindful, just don’t look at a stock and, Oh, it’s below average volume. Well, what the heck is your setting? Maybe it is correct, maybe it’s not but you need to know. So if you are not long this stock the better entry would have been around $80.00 or so. I picked up some this morning, I haven’t owned any here but I picked up some this morning. As long as you are setting a stop for say 4 percent I think you could buy it now. Though again, Monday, Tuesday, Wednesday, I would like to think that at some point the stock will drift down closer to 80.00 maybe even lower and you can buy some. I am just pointing out the trend, higher highs, higher lows, as long as this thing keeps moving up here.
Free Chart