Here’s your trade on $MNDY – August 12, 2024
Dan Fitzpatrick here at Stock Market Mentor. I’m looking here at monday.com ( NASDAQ: MNDY ), they reported earnings this morning, and they were monster numbers.
The stock gapped up over 10 percent. I think it opened about 10.5 percent above Friday’s close. My suggestion to my members was, it’s bumping up against this resistance here, we’ll make this red. It’s bumping up against this resistance where it had peaked here, where it had peaked here, so now it’s back up again.
So it’s like the low-probability trade would be to buy the stock now, without some type of confirmation that the move was going to work, that the stock was going to go higher. As you can see, it did. From the 250.00 mark, it is up another 3-3.5 percent or so, which is fine, it’s great if you bought this.
If you look at the weekly chart, you can see again, the stock is up, basically at the top of this long-term channel. So the question is, is it just going to continue up and break out of this channel or not? I can’t guess, and I don’t think you should either.
The first time I featured this stock was back here. I think I even talked about it with Charles Payne when I was back in New York, but don’t give me credit for this move. The stock is up 40-45 percent since that time. That’s awesome, but it was also, at one point, down 30 percent.
For me to take credit for this would make me no different than the typical TV knucklehead who always wants you to remember the good calls, and forget about the bad calls. And also wants you to ignore the in-betweens, between when they bought and when they sold a stock.
So the bottom line was, it turns out this was a good sock, but it’s a really crappy chart. And I still can’t say, Oh it’s broken out to a new high, it’s time to buy this stock. I think, what I mentioned in our trading room was, when the stock was up I said, “Hey, if you want to buy a little bit, then put a stop down a little bit below the open, something like that. Hopefully, nobody took me up on that, well, if you did you made money.
Here’s what I think now, I think that you have got to look at this as a trade that was missed. I could have bought it here at 190.00, now it’s up at 260.00. If I had bought it here and then held it all the way through earnings, but not too many people did that, so all this stuff doesn’t count.
I look at it this way, we look at the way this thing traded during the day, a five-minute chart; this is how it traded during the day, 1 hour, 30 minutes, and 15 minutes. The stock really gapped up and traded off right away. And then the rest of the day was pretty strong, right above this volume-weighted average price, now at 250.00.
You could say, Well all right, I’m in, I want to buy this stock, this is it, Dan’s wrong. And I could very well be wrong, but this is what I do, set your drop-dead price at 250.00. So if you’re buying the stock here, set it at 248-249.00 and you’re risking less than 5 percent, and getting in on a rocket ship.
This isn’t my recommendation because I’m just telling you, that I can’t make a trade like this, it just doesn’t fit any of my profiles. That makes me the only guy who’s telling you what I do. You can do something different, you would probably even make money on it if you watch it really closely, it’s for real active traders.
But if you keep a stop below today’s intraday low, then what you’re effectively doing is saying, I think this thing’s going to keep going. What’s it going to take for me to be wrong? It’s going to take the stock to pull back below where the stock opened on Monday, right when earnings were released.
That’s the way I would trade this if I wanted to trade the stock. To put it another way, I saw this on Monday, I can’t do it on Tuesday.
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