Here’s how we’re going to be trading on Monday morning — live. Check out this setup on Google ($GOOGL) (February 28, 2020)
GOOGL Y2108 GOOGL MSFT AAPL FB
I want to look at Google ( NASDAQ: GOOGL ) real quick and this is why: This is kind of a textbook pattern.
I think the market is oversold; if we have some bad news over the weekend, a really, really bad headline can crush the most favorable technicals, in a heartbeat; that’s just the way it goes.
If we have some kind of worsening of the situation then we may not have a big rally on Monday. We may have a little rally and then that turns into a big route where stocks move lower. But we don’t know; nobody does, anybody who tells you they do know is a flippin’ idiot and they believe you are dumber than they are, which actually is like a level of dumb. Nobody knows.
As I look at this, I am looking at the percentage of stocks (T2108) that are above their 40-day moving average, that’s kind of low. The percentage of stocks that are above their 200-day moving average (T2107), that’s kind of low. This stuff is not quite historical lows but it is kind of low.
That takes us back to Google ( NASDAQ: GOOGL ) and it is just one of 22 examples that I have in our Strategy Session over the weekend. This is a stock that is so oversold that I think there will be a trade to the upside on this on Monday; I could see this going up 50 or 60 points. Now, that’s not that much in a percentage basis but if you are trading options, like you buy a call and then sell a higher strike call, that’s a bull call spread, that could be a pretty good chunk of change for not much money.
The way the market is setting up right now, my gosh, with all of these stocks ( NASDAQ: MSFT ) that are giving us such opportunities ( NASDAQ: AAPL ), ( NASDAQ: FB ) I think that we are going to be able to make some pretty good money on Monday.
Remember, if you are not selling high you won’t be able to buy low. Instead, you will just be hoping that other people will bail you out. I would rather feel the exuberance and the elation of buying low and making a lot of money, than the relief of just having other people buy low, make a lot of money and bail me out of a trade that I never should have been in, in the first place. So unless you are getting out at the right time you will never have any firepower to get in at the right time.
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