If you missed this morning’s trader training session, you probably missed Sketchers (SKX). (April 18, 2019)
SKX REIT CHCT ACC CTRE
This morning I hosted a trader training session, Live Trading at the Open, and I just wanted to go over the way this stock traded. I’ll say it, this wasn’t my “pick”; I was looking at some healthcare stocks and some of them made some good moves but I don’t want to talk about those right now.
One of our members pointed out Skechers ( NYSE: SKX ) and that’s the nice thing about working together in a trading room type of environment, you have got many eyes looking at different things. And so right off the bat this stock gaps down on earnings that were “disappointing” but they weren’t really that disappointing because the stock falls down here and immediately turns up.
This is on a 5-minute chart; we were in pretty early, I forget exactly when, but ultimately the stock runs up another 5 or 6 percent from the top here, this would be the latest you would get in, something like that. And then it runs up ultimately another $2.00, which on a $30.00 stock is a pretty good trade.
I just wanted to point this out to you and then I want to look at some REITs ( INDEXDJX: REIT ) stuff real quick. The idea is, as a stock is doing this I think it is really important to have a multi-window view. I am not going to go into detail on it but it is a 1-minute, a 5-minute, a 15-minute, and then a daily chart. You can just be looking at this, the 1-minute chart, and comparing it to that. It will keep you honest because you will be able to see how far the gap was. And you will be able to compare the price with where it is on a 1-minute chart or a 5-minute chart. Where this actually went was, it wound up filling about half of the gap and that is the type of a thing that you will actually kind of see as a fairly common occurrence.
Anyway, this was a good trade on Skechers ( NYSE: SKX ). The thing that was cool about it was it gave us logical places to put stops almost from the beginning, which means that then as long as the stock cooperates, and it was cooperating here, it means that you can ride it up and make some money.
Let me show you this; some of the REITs ( INDEXDJX: REIT ), which sport some decent dividends, not great but they’re enough to attract money managers. Some of the REITs ( INDEXDJX: REIT ) have been doing well, sold off for a few days and now they are finding support, so this would be for you longer-term traders. I look at this as just an indication of what the overall REIT ( INDEXDJX: REIT ) market is doing.
Then we look at some of the details, you can see the Community Healthcare Trust ( NYSE: CHCT ) kind of sold off like all the other healthcare stuff did, but so what. Healthcare facilities, people aren’t getting younger they are getting older and fatter, which means there are probably going to be more of them in here a few years earlier than you might otherwise think. In my view this could be a good buying opportunity; the dividend is almost 5 percent. Support at the 50-day moving average, I would say resistance is here, you could start a position here, stop right there. Add to the position on a breakout above here; that’s how I would trade this thing, it’s working really nice.
Another one is American Campus Communities ( NYSE: ACC ); a steeper sell-off but the thing I like about this is, it has a really solid support level right there. It has got a really solid support level right there and so you could buy the stock and then you put a stop just down below the 50-day moving average.
And then finally here is CareTrust REIT ( NASDAQ: CTRE ). another healthcare facility. You can see it is kind of squeezing; the Bollinger Bands are actually still pretty tight. The thing that is cool about this is it is still right a the 50-day moving average and that makes it a low-risk, defined risk entry. We can keep a stop down here at we’ll say 22.75, that’s about 2.5 percent room on the downside and that makes it, again, a low-risk, a defined risk trade and this can work for you, 3.5 percent yield. Not huge, but it beats the snot out of the 10-year and you also get some capital appreciation.
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