Want to be a master at trading Under Armour (UA)? Here’s how. (April 13, 2015)
Lets look at Under Armour ( NYSE:UA ) in this video. Now as you may know, or you may not, but you’re in one of the two categories, Jordan Spieth, won the Masters. This guy’s like twenty-one years old, I have T-shirts that are older than this guy; they don’t look very good and they have holes in them, other than the four that they all come with. Anyway, this guy wins the Masters and he’s got nothing but Under Armour ( NYSE:UA ) on. I don’t know what he has on under his Under Armour but I would imagine that’s true too.
So what are you going to do with the stock? It got a lot of publicity, Under Armour, the first time that’s ever happened, so “Oh my gosh this is awesome, got to buy this stock.” Well sure enough today, on a day when the market was generally down, Under Armour ( NYSE:UA ) is up almost 2 percent. Don’t buy this stock now, or I should say, don’t buy as much as you normally would if you’re eager to get this stock.
Here’s the thing, you can see it zigzagging here, I look at this and if this is as high as the stock goes, 85.11, when a guy wins the Masters wearing all this Under Armour ( NYSE:UA ) stuff, if that’s as high as it goes, what’s the catalyst to take it higher? What possibly can happen in order to make the stock even more desirable to short-term traders? Well, I’ll tell you what. On the weekly chart this is walking right along the upper Bollinger Band, AND not insignificantly the company is due to report earnings a week from tomorrow, next Tuesday they report they’re first quarter earnings; don’t expect them to be weak.
So here’s what I would do. If you want to own Under Armour ( NYSE:UA ) figure out how many shares you want to own, hope for a little pullback tomorrow but go ahead and buy some, go ahead and buy some. I’m not going to make a bold prediction on which way the stock’s going in response to earnings. But I will make this prediction on the weekly chart, I don’t think the stock’s done going down at 85.11, not after the kind of run that it’s had, I think the stock continues to move. But we just don’t know if it might first fall back to $80.00 or so.
So rather than sit there and have to guess one way or another, instead do the Solomon trade, King Solomon, split the baby; buy a little bit now and then if the stock pulls back, maybe they have horrendous numbers, and if they do buy more. But take a little bit of stock now just in case they announce great numbers, stock pops up above 85.00 and you don’t get a better chance to get in. But take some stock now and then hope for a pullback.
Buying this stock on pullbacks has worked, buying it on breakouts really hasn’t. Look at this one, you would have bought the stock on this day, lets say you got it right at the top, yippee, you’re up how much, 20 percent since that time. However, you also had to withstand a 15 percent draw down, and you had to sit around here waiting with somebody else having your money, for what, half a year. So buying these breakouts generally doesn’t work. Buying the pullbacks pretty much always has. So that’s what I want you to be doing with Under Armour ( NYSE:UA ), half now and half in response to earnings.
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