Here’s your trade on Altus Power ($AMPS) – September 21, 2022
AMPS SPY
The Fed hiked rates, as predicted, by just about everybody, at 0.75 basis points ( NYSEARCA: SPY ), almost a full point.
Anyway, it’s kind of interesting, very predictable, this, literally exactly this, A sell-off, the first move always has a snapback and that was this. We get the big sell-off, the Fed is hiking rates and by the time we get this, cooler heads say, wait a minute, we knew that there was going to be another hike, which is why stocks continue to go down. So what are we thinking here, what are we trying to do?
Then we get the buyers that come in and say, okay, that’s it. And so the market goes back up, and now the real move happens. And that is kind of the way these things work, these real newsy headline things work. The first reaction is wrong, the second reaction is a reversal of the wrong, and after that, you get the real move.
Now, don’t think that I am just talking about zig zag zig. Like, okay we get a sell-off and then we get a rally, and now is the time that you have really got to sell. That did work out here and, frankly, that is typically what will happen on this kind of thing. However, don’t get so smug about it because you will see a time when you get the big sell-off, then a reversal of the sell-off, then some meandering around, and then the real move happens.
What I am really saying is, one way or another, when you get a big move like this you have to draw the box and say, okay, where is the right side of the box going to be filled again? And it was, now we’ve got the real move. Now, what is my prediction for this? I think that the market is going to continue lower because that is what it has been doing. And we have still got a lot of reasons why that is.
All I am saying is this, this isn’t the bottom. You are not going to see the bottom next week or the week after that. You will see a test of this level. Will the bulls pass the test and then the market runs up again? I would say it sure would seem to make sense to me that the market is going to come back, rebound here, and then you are going to get a lot of buyers coming in after all. That is kind of what happened here, why wouldn’t it happen again?
If I was a trader, and I am, I would make that bet. I would look for some kind of rebound here because guess what? Remember I was just talking about the zig-zag, you get the first move, but that tends to be wrong. And then the second move is a reversal of the wrong, and then the third move is the one that counts. Well, here we go, we get a move down here. We are going to get some kind of rebound, and then after that is the move that counts. Maybe it will go higher, maybe we go lower. But what we are not going to do is just drift around here.
This entire video, so far, was one big massive digression. What I wanted to talk about is Altus Power ( NYSE: AMPS ) here. This is a stock that came up on one of my screens and, frankly, I think it was actually a stock that came up on Scott McGregor’s screen and he passed it to me. I like the way that this is trading because in a crappy tape this is up. In a crappy tape, this has been, just on Wednesday the 14th, it printed an all-time high. This is just the kind of stock we want to look at.
To be perfectly honest. I think you could take a very, very small starter position right here; with a stop just a little bit below yesterday’s intraday low of 11.29. So you can see you are taking about a $.90 risk, something like that. You could take a small position here and then look to build on it if the stock breaks out. But this is a real touchy trade because breakouts typically have not been working. Although here, I would say that this breakout worked to about 25 percent.
So this is a stock that you definitely, in my view, want to watch. I think you want to own it, the only challenge is, are you going to be buying some here or are you going to wait for a breakout? If this is a stock that looks like something that you want to own I would split the difference. I would be taking a little bit now, just make sure you have a stop, they’re important. It’s there, the oh crap I’m wrong levels, and then you can participate in the upside when this stock moves higher, as I believe, ultimately, it will.
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