Here is your trade on $AI – May 30, 2023
Dan Fitzpatrick and I want to look at AI ( NYSE: AI ) today. The stock is up 33 percent just today. The company reports earnings tomorrow after the close, so 24 hours from now you are going to know exactly what this company is doing and what the stock is doing.
I will just kind of explain to you how we have traded it here. What I did was, I got people in, not at the bottom but when the stock broke out, like on this day here. Back here the stock ran up above the 50-day moving average, trading sideways for a while. It was getting really, really jumpy.
We had a bunch of different trades going on this stock, all bullish trades. But since the entry here at we will say, 23.00, wherever it was, this trade was up, like 90 percent. Now, it has been a while since I raised the stop, at some point, why bother?
But this is what I am suggesting to our members to do; with the stock up almost 90 percent since we bought it. And the way things are going, I will show you intraday in just a second, but what I would suggest doing, I don’t think that just closing out of a position like this, completely, is really a good policy over the long run because you wind up getting shaken out of stocks.
Then at least 6 months from now you will look back and say, Well crap, I was shaken out. When what you were really doing is, you were taking profits. You were taking good profits on a trade because the stock had gone up so much, case in point here. So you took these good profits on a trade, and the stock went up a lot. And then 3, 4 5, 6 months later you look at it and it is up another double and you are wondering what the heck happened.
My approach is this, when you have got a stock that is up this much but you like it, I am looking at the weekly chart, I like the way the stock is trading. Just a couple of years ago it was much higher when less was known about AI than is known right now. I know you can talk about this and that the valuation was nuts and this and that. Okay, well that is trading. Welcome to stupid valuations up and down.
So what I am looking for is a bigger move. Not necessarily from right here, but I am looking for higher prices in AI ( NYSE: AI ), this is what I am getting out of the weekly chart. But with that said, you can’t discount the move here, this has had one hell of a move.
So what I am going to have our traders do is, take, like, half off the table, which effectively gives you a free ride on the rest of it. Or take 30 percent, or 40 percent, but take something off the table simply because you’ve got such a good profit in your trade that you can afford to leave some on.
You can afford to keep some stock and then maybe it will go even higher. But you can take some stock off the table and book a really, really good profit. The way I see this, remember this thing has gone up a lot in a short period of time.
So the way I see it is, if the company reports earnings that really excite the market and traders are coming in. In other words, there’s a bid for the stock, the stock goes up. My suspicion would be, that a stock that opens up here is probably going to sell off quite a bit, simply because of the parabolic nature of this move.
So again, my suggestion is to take some off the table and book those profits. Say, Thank you very much, sir. May I have another? But then keep some of your stock out there so that you can take advantage of any further gains.
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