Are you trading with Cathie Wood? It’s not a bad idea. – December 13, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to go over a couple of trades here that Cathie Wood did today.
What she did was, she sold a bunch of Tesla ( NASDAQ: TSLA ) and then she bought a bunch of Archer Aviation ( NYSE: ACHR ). I’m not a big Wood devotee because she makes people a lot of money or loses them a boatload of money. And while she’s losing them a boatload of money she’s saying, “Oh, but just wait, my 5-year price target for such and such is whatever.”
Anyway, I always look at what she does because I think it’s interesting. She’s obviously an extremely smart person, I think you ignore her at your peril, and I’m not going to do that. So here’s what she did, she sold Tesla ( NASDAQ: TSLA ), and I can look at this, it’s up at an all-time high. I could say, great trade Sherlock because this thing is just going higher.
My sense is, that it’s not a prediction, though maybe it is, I think Tesla ( NASDAQ: TSLA ) is probably going to hit 500.00 before it finds any kind of resistance. The only thing that goes against that grain, we’ve had this on our Active Trade List for a while, the only thing is, this is up 45 percent above its 50-day moving average.
Now, if we’re looking at this here, the last time it peaked it ran up 42, 42.5 percent. How about here, when it peaked here it was up 30 percent. How about back here, this was a big monster top, maybe it was more here, that’s 48 percent. What I’m saying is, that when you just try to look at things objectively, just look at things objectively.
Just look at the moving averages and don’t be like Tesla ( NASDAQ: TSLA ), oh boy, I love Elon Musk. Or, oh Tesla ( NASDAQ: TSLA ), I hate Elon Musk, I’m going to short this. Don’t be thinking about that stupid stuff. Instead, if you’re looking at a chart objectively you will look at this and say, Wow, this is extended a lot, this is really, really extended. And my question is, how much farther will it go before it has some kind of a pullback or some kind of correction?
I don’t know what the answer to that is, and I’m not going to guess. Because if I guess and I turn out to be correct, then you’re going to think I’m really smart. And if it turns out that I’m absolutely wrong, then you’re going to think I’m really dumb. And frankly, that’s the bid and the ask and I’m somewhere in the middle. I’m not that smart and I’m not that dumb.
Instead, what I would suggest you do is use the 8-day exponential moving average to key off of this if you are long Tesla ( NASDAQ: TSLA ), which gives you about 8 percent downside. And for the opportunity to sit around and enjoy more upside, just today, on Friday, it’s up over 4.16 percent. So it doesn’t take too many more days to make the 8 percent risk on the downside totally worth it.
She ditched some of this, I don’t know if she still holds any Tesla ( NASDAQ: TSLA ) or not. But she picked up Archer Aviation ( NYSE: ACHR ). As it turns out, It seems like it’s a little bit early on this. But then, people buying Bitcoin at $1,000.00 were a little bit early on it too, and look what happened.
Archer Aviation ( NYSE: ACHR ) is producing electrical vertical takeoff and landing aircraft for urban environments. Basically, they want to create air taxis. That sounds good to me, I wouldn’t ride in one of them, but maybe you would. This has gone up 144 percent from this last breakout here, and at one point it was up way more than that, almost 200 percent. So you can’t argue with this chart, not at all. I’m sure the fundamentals of the company show that it’s hemorrhaging money.
The way I look at this is, this is a wild stock to be trading, to be investing in it like she’s doing. Okay, well I guess that works, but what I would suggest doing is this, step back a little bit. First of all, just look at the chart. Is it something you want to be involved in? This is a wild one, but I would instead be looking at this. This is the current trading range here. Maybe you can get a little narrower here, this is a different trading range.
I look at this here and I see a lot of pain, I see a lot of pain right there. This is like, to me, one big red bar that you don’t want to be involved in. This stock still has to climb through quite a bit of regret from people who bought the top and now they’re looking to sell their stuff. I would look at this as having about 15 percent of really, really hard climbing at this point. Even for an air taxi, that can be a tough deal.
So instead, what I would suggest doing is watching it. Hopefully, the stock will become in a tighter range without having to contract the chart like I’ve just done. You want to see it grinding around here a little bit. My bet is, it will be doing that. Stocks like this, that are just so, so volatile don’t stay that way.
Ultimately, the buyers and sellers get tired, and they get worn out, Then ultimately, the stock will settle down, probably right around 8ish, and you say, buyers and sellers have some kind of an agreement as far as what they think the right price is, and we love that agreement. Then we look for somebody to break the agreement, boom, then the stock moves up. That’s what we want to wait for.
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