Here’s a trade idea on Installed Building Products ($IBP), and a wrap up on Grayscale Bitcoin Trust ($GBTC) (January 11, 2021)
BP SPY NVDA SPY BP GBTC
I’ve got a random stock for you right now, it is Installed Building Products ( NYSE: IBP ). and this is why: Just kind of generally looking at the pattern this is what we are really seeing, kind of a cup or just a bull kind of thing. But within this pattern we have, zigzag, down, up, down, a very defined short-term trends within a more intermediate trend that is following right along the 50-day moving average.
You will see right here, this part, below the 50-day moving average; we will continue these zigzags right here, below the 50. And then, what happens? The stock breaks out, rallies back up kind of the meet the top of this little bowl pattern. It falls back, and where does it hit? It hits the 50-day moving average and it stays above that level and now here we are. So we are continuing this zigzag pattern; I like the way this guy is trading right now and I am looking for it to move up even higher. This is what I am looking for but I am also going to keep a protective stop just a little bit below $100.00, so this would be my trade.
I could get into some of the other stuff that’s a real fast mover and that would be for the Twitter ( NYSE: TWTR ) crowd. Everybody is always crowing about how much money they are making. I swear, I didn’t know there were that many billionaires but I see them on Twitter ( NYSE: TWTR ). Some of you people are amazing, I envy you, you never have a lousy trade, I am not talking to you, I am talking to our members really.
These are the types of things that we are looking at here in an environment, where everything is good, the major averages ( NYSEARCA: SPY ) are still doing okay but let’s just say there are a few rattles under the hood. I am not seeing a lot of these breakouts really succeeding; like NVIDIA ( NASDAQ: NVDA ), a nice impressive breakout today and that thing is about as popular as a fart in church in the afternoon. The stock runs up and then faded; these breakouts like this ( NYSEARCA: SPY ) aren’t really working.
But if you look at IBP ( NYSE: IBP ), this gives you a well-defined, a defined risk trade and you understand the pattern and then you are looking for this type of thing. If the stock does that it’s fine. If it doesn’t do that, it just continues to wallow, then you can just make a decision, do you want to stick with the stock until it breaks because it’s not broken. Or do you say, well, I’m impatient, I thought this was going to move tomorrow so I will sell it? Whatever, that’s your choice.
I will end with this though, The Bitcoin Trust ( OTCMKTS: GBTC ); this is something that a lot of people have made really good money off of. I am sure that there were people talking about buying this way before me. I remember in October I posted a tweet, I got our members into it back here, I don’t think it was this low, maybe around $14.00, maybe even $15.00, I don’t remember. I wasn’t bottom ticking it I was trend trading it.
But this stock went up really, really well and then last Friday, I had kind of mentioned it on Thursday at least to our members, and then on Friday I said, “Hey, I don’t like the way this thing traded Thursday”, it gapped way up, and then it couldn’t hold the gap. And then certainly Friday, so this is where it closes here, and then this little diagonal line here, this is the distance between where it closed on Thursday and where it opened on Friday. So that is a pretty big move for just a goofy old stock, 5.4 percent, and then it virtually immediately tanked.
I have seen this, I am not comparing the two at all, you will know what I am talking about in just a second. I remember back in 2000 when the Nasdaq reversed one day. The QQQs ( NASDAQ: QQQ ) had this big old bearish engulfing pattern, where they gapped way up and then they closed lower, way lower. You looked at it on the weekly chart and it just looked ugly as hell and then you knew that that was the end of the rodeo. That was it, everybody is getting bucked off. You have got to go home before somebody takes your buckle.
I am certainly not comparing this to that, though you never know. I am just saying that we took profits and this has actually been the best trade that I had in quite a while. And now I am out of this. Do you think I am itching to get back in? I’m not, I’m not. This stock is not my witch (substitute a B for the W). This is just another stock that I made really good money on. I have absolutely no intention of getting back into this until and unless I see another setup.
That is, at least the way I see it, the way you want to trade. You want to remain loyal to and focused on your account, not a particular stock that you did really well on. Or for that matter, a particular stock that you didn’t do well on, that you got killed on and by God, you are going to go back and punish that stock by making money on it. The stock doesn’t know you, it doesn’t care about you. And even if it did know you it probably wouldn’t like you because you have the type of disposition that really wants to get back at an inanimate object that is actually a lifeless form of nothing; it is just 3 or 4 letters in cyberspace. Don’t be that guy; focus on your money. Focus on your account.
This was a monster trade, get over it. You are out of it, be happy about it. Don’t say, oh my gosh, I just want to get that feeling again. No, that’s a whole Barry Manilow song back from the 70s, don’t be that guy. He was short, he had a big nose but he was a hell of a songwriter. You don’t want to be Barry. You want to be the guy who was constantly making more, and more, and more money because you are trading better, and better, and better. That’s what I am here to do; I am here to help you do that because at the same time I am helping myself. Any good teacher will tell you that they learned the most when they started teaching and I can attest to that myself.
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