Don’t feel like going out to eat? Domino’s ($DPZ) delivers – June 3, 2024
This is Dan Fitzpatrick at StockMarketMentor.com. Today is June 3rd, the first trading day of June ( NYSEARCA: SPY ). May was, well let’s just say, it ended with a bang. Thank the good Lord that the market doesn’t close at 2:30 because if it closed at 2:30 that would have been a real problem.
We got this big old massive buy program, and it looked, to me, like the first thing in the morning we were going to get a continuation. In fact, I even sent that out in a note: It looks like Friday afternoon’s rally is going to get a continuation this morning, and it did for about five seconds. I’m joking but not by much.
The stock market ran up right away, and then it just trickled off for the next few hours, almost four hours before it finally hit a bottom. And then it started to do the same thing again, just like it did on Friday, only this was pretty dramatic. Just like it did on Friday it did the same thing here.
The interesting thing is, it started right at 1:15. Typically, these buy programs, or sell programs for that matter, but the buy programs are the ones that really seem to be getting more attention, shall we say, because everybody got all lathered up about, oh my gosh, it’s Armageddon and everybody’s paying attention. Suddenly everything shifts and you wonder what the heck happened.
These buy programs are really important. Typically, they will start straight down, a half an hour down, or straight up, but sometimes you get straight across. You’ll never get 234.00, they’re always even numbers. That’s what we got again today, but it’s really encouraging because, once again we got a higher intraday high, and a higher intraday low. And that’s what we want to see.
Closing locations are pretty important, and this closed at a really high location, relative to where it opened. It was very, very close to where it opened here, and we had a positive day in the market. This is a really good sign that maybe there’s more buying ahead. A lot of things in the market that I care about the market doesn’t really care about. Hence, the things that I care about are things for me to care about, not you, not anybody else. The market is not paying attention to some of my worries, therefore, I don’t worry.
Now, as long as we get things moving up here, we can look for some nice moves higher in some of our other stocks. For example, Domino’s Pizza ( NYSE: DPZ ) was one that I put on today. This had been in, and still is, in a squeeze. The Bollinger Bands are less than 5 percent wide. I keep track of this type of thing in my Stockwatch app, and it really helps me find this stuff. And then I will just set an alert and boom, it goes off. I doubt I’m the only guy that does that.
I see this move and then I’m looking around, this is end-of-day stuff, so obviously I took this during the day, I didn’t know what the final volume bar was going to be. But just by the way it was trading you could see that it was a high volume day. The thing that really got my attention was Friday’s action. I didn’t see this on Friday, my alert went off today, and that’s why I looked at this stock. I don’t want you to think I look at everything because I don’t.
As soon as I look, though, I’m seeing this action here. Heavy volume, this is the highest volume since back here. And then it almost hit this level, and Then before that, it was back here. When you see a skyscraper like this, a red skyscraper is what I call them, with massive volume, that tells you that there’s a lot of selling. And that’s just looking at this.
Then you go up and look at the price action, and what do we see? We don’t see this kind of bar, where it closes really, really close to the low of the day, almost at the low of the day. This would be massive selling, the only reason this thing stopped going down was because the closing bell rang, here not so much at all.
Here we get a nice move lower, a bounce right off the 50-day moving average, and then a rebound up quite a ways from 500.00 up to close at 508.00. That’s not a big percentage gain, but you can see very, very clearly what happened. You don’t even need to look at the intraday chart. This was a big reversal day, and then what happened? Dan’s alert goes off on Monday, boom, and I see this stock, right above the 21-day moving average. It took me a bit to get it out, what are you going to do?
Anyway, we’re in this stock now, and my suggested stop for all of you guys that are trading this stuff is 498.65. I put it just a little bit below the 50-day moving average. Assuming this stock keeps going up, and we don’t know that it will but this volatility squeeze has set the stage for that. As soon as the stock starts going up, then I’m going to want to raise the stop a bit and start protecting the trade. You don’t want to do it too quickly because one thing that we see in this market because it’s volatile is, that we could see a retracement here.
The stock could pull back, maybe even for a few days, and then, hopefully, we get this kind of thing, and it starts building the right side here. And so you don’t want to get into this, and then the very next day get shaken out, you take a little loss, and then watch the stock go up without you. I will give this a little more room, but it does have to stay above the 50-day moving average. And so I’m setting it just a little bit below 500.00 to give it a little bit more wiggle room.
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