Looking for another dead cat bounce? Try Kelly Services (KELYA) (May 15, 2018)
KELYA VIRT KELYA TTD
Let’s look at Kelly Services ( NASDAQ: KELYA ) in this free video and here is why: They reported earnings right? Obviously, they stunk up the joint, BUT they did actually beat on revenues so that says something. That is a pretty thin gruel if you bought here prior to earnings and now you are down 30 percent. However, if you are like me and you are just looking at scans and looking for these oversold stocks to buy this shows a pretty good opportunity.
If you remember Virtu Financial ( NASDAQ: VIRT ); Kelly ( NASDAQ: KELYA ) is a lot better than this one, but I looked at this the other day; I explained a trade that I had made and it actually worked out pretty well. I held it less than 24 hours and just sold this the next day for a short little profit. I am here showing you this because I want you to know we can find this stuff every day. Not JUST these oversold stocks that we look at for rebounds but you can find squeezes and just all kinds of stuff if you have the proper tools and the proper mindset for it.
What you need to be doing is, you think about the pattern, you think about the dynamics. You don’t think about the ticker. You don’t think about being right, you don’t think about being wrong. You think about the dynamics and in THIS case what we are looking for is a stretched rubber band. And rubber bands can stretch and stretch and stretch and stretch; you don’t know exactly how far they will stretch before they break. But what we are looking for are these rubber bands that really, really stretch and finally you catch them JUST when they are about to snap back. But you have to be patient with them; sometimes it works and sometimes it doesn’t.
There are other things that you can do as well. I will show you Kelly ( NASDAQ: KELYA ) and then we will look at The Trade Desk ( NASDAQ: TTD ), which is a trade that I put on yesterday that I had to close today for a loss. Here we have got a rubber band that is really stretched super tight. The fact that the stock closed very close to the low of the day shows me that the selling is not quite over. It is almost like you get the sense that the only reason that the stock closed at 21.59 is because the closing bell rang; it was just kind of drifting lower and lower.
The idea here would be, if the stock starts trading above where it opened at, which was 21.62, it’s 10 cents higher, if it starts trading above there then I get the sense that the sellers have just reached exhaustion and so you would place this trade. The idea is this: You are buying the stock at 21.62 and the low is 21.44 so you are setting the stop at 21.39, literately that tight. But you have to wait for the stock to trade up this high. It is half a percent; maybe you give it a percent but the whole idea is this: You are trading the entry, you have got to start with the entry and you want to be buying a stock. You are not buying a falling knife, you are buying a knife that had fallen, hit the butcher block and the handle is shaking. That is when you are buying the stock.
So you don’t buy this thing at the open. You wait and you buy it ABOVE today’s open, which is 21.62. Then you know that “you are not the first guy out of the foxhole”, you are not buying the exact low. You are right behind somebody who has had enough buying power to push the stock up to a higher level here and show you a green bar. So if you can do THAT you are going to be in on this just fine. I look at these things right towards the end of the day; I looked at a bunch of them today, I did take a small position in this today. If the stock gets up above 22.00, maybe 22.50, that is when I will start looking for the exits.
Now, The Trade Desk ( NASDAQ: TTD ). I mentioned yesterday that I took a short position in this stock, a very small short position with a tight stop; I got stopped out today. I framed my trade with a small position and my idea ALWAYS was that this stock was going to revert lower. But if it didn’t I would get out, I wouldn’t sit here and fight it because there are 22 million shares in the float; that is not much. And 20 percent of them, actually more than that, is actually short. So this is definitely a short squeeze in the making. I almost want to pivot on it but I didn’t do that. You could, however, watch this stock and if it is up again tomorrow this would probably be a really good stock for a very active trader.
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