Here’s how I’m trading the Walgreens Boots Alliance ($WBA) news. (November 05, 2019)
WBA DOW VZ WBA
I want to look at Walgreens Boots ( NASDAQ: WBA ) today. You can see this move the stock made just today. The big news was that they are considering going private. That would mean buying all their shares from people like you and me and getting off of the market.
I had sent this stock to Jim Cramer; in fact, if you are looking at this video I am sure Cramer has already covered it. He had asked me over the weekend if I wanted to help him with Off the Charts, which I sometimes do, and so I picked three Dow components. One of them was Walgreens ( NASDAQ: WBA ), which I really liked, I still do, which I will get back to in a second. Another one here is Dow ( INDEXDJX: DJUSBM ), this is the old DowDuPont ( NYSE: DD ), which was the merger between Dow and DuPont, a lot of stuff going on here.
The thing that I like about Dow ( INDEXDJX: DJUSBM ) here is, again, it’s a Dow ( INDEXDJX: DJUSBM ) component but they got a dividend of over 5 percent and so that is going to get you some institutional interest.
Another stock that I like is Verizon ( NYSE: VZ ) but not here. You want to wait for it to run up above 61.50. This has been consolidating for more than this year. It is almost a year that this consolidation has been taking place; I wouldn’t buy it until it breaks out above 61.50 and I would look for it on volume. That’s what I would be doing here.
Another one, by the way, it’s not a Dow component anymore though, is AT&T ( NYSE: T ). They have got, also, a really strong dividend and the stock is doing well.
But back to Walgreens ( NASDAQ: WBA ). They may be going public and they may not. But one thing that you have got to understand is, the market really did kind of anticipate a big move. The big move actually started back here on Friday. The stock had closed on Thursday in this range but you can see where the last low was here. And then we had a higher high relative to this one and then a higher low relative to this one. If you even look at these lows here they were kind of in line with this may low.
But the bottom line is, this has been a really solid long base. And then we just get here, on Friday, a push on almost twice average volume above the 200-day moving average. And what is interesting here is, it’s a Friday. Typically, you are not going to see a lot of buying activity into the close on a Friday, there is just unnecessary risk unless maybe somebody was trying to accumulate some stock. Well, yesterday the stock gaps up a little more and starts running up; it closed up nicely on the day. So it’s up 4.5 percent on Monday, but from Thursday’s close the stock is up almost 9 percent, so that was a big move.
I bought some first thing in the morning because I will absolutely trade my analysis. I don’t like to give people trading ideas and then not be willing to do them myself, so I kind of lucked out. I didn’t have a big position because this isn’t the market, at least for me, that rewards big positions; it sure does seem to penalize them though. So I got a little bit of stock on this and then the stock pops up.
So now what do you do? Frankly, I think it is still okay to buy this stock but I wouldn’t really be inclined to pay up for it. What you have got to hope for is, it pulls back a bit and gives you an opportunity to buy closer to 60.00, even lower. But you can’t discount the length of this base. This was a short-term big, big wiggle and jiggle here and if you are interested in just a quick trade I can’t even tell you what to do now because you have to be trading it intraday. You have to be trading this intraday, but if you are just looking for a good solid company to buy that pays a decent dividend, this could work for you. Hopefully, you will get an opportunity to buy it a little bit lower.
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