Here’s what I did on LHC Group (LHCG) today. We’ll do more of these tomorrow. (April 17, 2019)
LHCG
Just a quick video here for our Free Chart of the Day and it has to do with LHC Group ( NASDAQ: LHCG ). This was a stock that was on our Growth Stock List. The fundamentals are really pretty strong; unfortunately, it’s in a bad neighborhood. The fundamentals are real strong; the EPS rating is 97 according to IBD. The growth rate is 20 percent. The PE, for whatever it is worth, frankly it’s not worth much, is 29. So this is a stock that is really solid; the problem is it’s in the wrong industry, healthcare.
We got this big sell-off yesterday; you should have got stopped out of your position if you’re a member. But then today, the way I was looking at this, this morning; I mentioned yesterday, it was at the 200-day moving average, likely placed for a rebound. And then today, first thing in the morning, the stock was up here. And to be honest with you, I wasn’t looking at it I was doing other things. Then as the stock started rebounding here, and this is just one of those, as luck would have it, I was looking at the stocks in my Watch List and I saw that LHC Group ( NASDAQ: LHCG ) was actually one of the top performers for that day.
I looked at the chart and decided, Hey, you know what? It looks like a pretty good opportunity for me to buy, so I bought the thing at 10:18. I bought the stock right in this general area here. This isn’t a Trade Along With Dan; this is just kind of a general comment about how you are trading here. So I bought the stock at 10:18, right here. What I did was, I’m looking at the VWAP, the volume weighted average price, and I thought, If this stock is done going down and now it’s under accumulation I am going to see the stock, on any pullback to the VWAP, I am going to see that stock being bought. Why? Because that is how traders gauge whether they had a good day as far as buying the stuff that they are supposed to be buying.
If they are buying too far away from the VWAP then whoever their boss is, whoever is running the portfolio is basically going to say, You know what dude? You suck. The volume weighted average price, in other words, the average price by volume, was $100.00 your average fill is 101.20; give me a break man, that’s a lot of money, that’s a lot of slippage. My idea was that I would be able to initiate a long trade with a stop below the VWAP. So that was a pretty low-risk trade based on where I bought the stock.
And what was my target? My target was also based on this right here, pivot point, 102.31, so I set my Sell Order for 102.30 and it was an OCO, order-cancels-order. So I would either be stopped out for a very small loss if the stock fell below the VWAP or I would sell the stock if it hit the pivot point; if either one of those would cancel the order that’s an OCO, order-cancels-order. And so as it turns out I was triggered, I was doing something else, boom, I got my trade. I was not tempted to buy back in when I saw the stock moving higher because this is a very heavy chart.
Free Chart