Check out Home Depot ($HD) and Netflix ($NFLX). While the broader market struggles, these two are working. (September 29, 2021)
HD SPY QQQ NFLX
I want to look at a few different stocks today. First of all, Home Depot ( NYSE: HD ). This isn’t exactly the sexiest name in the world. You probably clicked on this link and went, Home Depot ( NYSE: HD ), I don’t give a crap about that. Fine, but I am covering it anyway because it’s my video.
Here’s the deal, when the market is really, really volatile, as it’s been, we look at the S&P ( NYSEARCA: SPY ), pretty nasty. We look at the Q’s ( NASDAQ: QQQ ), pretty nasty. Then we go back to Home Depot ( NYSE: HD ), pretty good, it looks pretty good to me. You are not getting rich on this.
I just opened this up as an active trade, not too very long ago. When the stock came off of this 50-day moving average, boom, right there, I said, “Hey, let’s go ahead and buy this stock and we will put an initial stop right down there. A super, super tight stop and then a lower one right here.
The idea is this, you want to be buying at a point where, if you are right, you reasonably expect to make money right away; even that day or certainly the next day, two days later is okay. But if it is even later than that you may hold onto the stock but you have got to just conclude, assume, whatever, that you didn’t buy it right, and that has to be okay.
What I like to do is, I like to wait, and wait, and wait, until I have a pretty high probability setup. And it’s the type of setup where, if I’m wrong, I know it right away and it doesn’t cost me much money. Because trading is actually speculating, it’s not money printing or money harvesting. You are taking your shot based on an educated assessment, which is based on your experience. The more experience you have had trading, we’ll just say, the better you are going to do.
And so then, as the stock moves higher here, again, the market is pretty crappy. And so we are moving up here, and up, and up, and up, and now the stock is back up there. So I think if the stock trades down to the 50-day moving average, this is a stock that you could buy, just don’t expect to get super-rich on it right away. You are kind of parking your money in something that is safe, that is not going to implode.
Now, one other thing real quick. Another stock I was looking at today was Netflix ( NASDAQ: NFLX ) and it was really kind of in this context. I haven’t been interested in this stock in quite a while. But it had that breakout, rallied up above 580.00 and then broke through 600.00, then it pulled back. So then today, I was looking at the stock early in the day and I saw how the stock started trading. So I put this on our Active Trade List, it was just a couple of bucks from where it is right now.
I like the way Netflix ( NASDAQ: NFLX ) is trading, but as always, you have got to define your stop. You have to be able to say, okay, where would the stock go to prove to me that I am wrong? And I would say, that would be if the stock goes down below this price here, this 568.00, which is the intraday low. So if you are buying it here you have got about a 6-6.5 percent risk on this and that is about it.
Anyway, here are two stocks for you, Home Depot ( NYSE: HD ) and Netflix ( NASDAQ: NFLX ), I hope this works for you. I hope you are not over-trading in this market because it is kind of choppy. It is going to take a while for it to get its footing or for the bears to come in and really take this sucker down.
Just remember that the more money you have at the start of the next move higher, the more you are going to be able to make because you have got that to put to work. So if you are losing a lot of money in a certain market environment, then you are going to have less to work with when the market environment turns more favorable to you.
Free Chart