Two Choices: Mattel ($MAT) or Meta Platforms ($META)? – October 2, 2023
This is Dan with FITZ IN FIVE. I noticed today that IBD had put out Mattel ( NASDAQ: MAT ) as a stock that was close to breaking out. It looks really good, it’s on a buy alert, and all that. It is at a proper buy point here of 22.64. Now, the high, on Friday, is 22.30. My bet is, if we go back to here it is 22.44, and that is kind of the high. We are going to go all the way back here, 22.64 was the high here.
What this method is doing is, it’s looking clear back, 45-days-46-days to get this last high. That’s all well and good, the last thing that I am going to do is criticize Bill O’Neil and his approach. You can’t do that, it’s like somebody who can’t throw a spiral saying Tom Brady was a bum; you just don’t want to do that.
With that said, I have a better one. If you are trading Mattel ( NASDAQ: MAT ), they report earnings on the 24th, which is almost 3 weeks, I don’t know if this thing is going to have a chance to set up between now and then. The bands are a little bit wide for me, the way this thing is trading,
Here’s the one I liked better, and the one that we have on our Active Trade List, Meta ( NASDAQ: META ). On this one, I can look back here, I don’t need to go back to here. I can look back here, the high is 312.87, so I could say that our entry point here is 312.87, so if it breaks out above 312.87, that is just right here, that is all I need right there.
I don’t need to go clear back to here because what I am looking for, on this, is this kind of a base. You can see the nice uptrend here, awesome. Then it starts drifting sideways and moving right along the 50, on both sides of it. Well, this is sure looking, so far, it looks like a base to me, not a reversal. It could be, but it is just looking like a base to me.
And so all I would need to see is a little poke above here. And that is going to help me feel good about getting my position going, and then, hopefully, we are going to get this kind of a cup and handle type of thing up here. I’m imagining, I’m doing what I call envisioning. I am looking and imagining what the chart would look like if I’m right about my trade.
I think, if I’m right about this, what’s the chart going to print? What is it going to look like in the future? And, of course, it can’t be magical thinking. Whatever chart that you draw in your mind or on the chart here, it has to be something that you have seen before, It has to be something that you look at and say, Oh my gosh, yeah, I’ve seen that a boatload of times. As opposed to, Well, I have never seen this before but it sure would be nice if I did.
So you are doing this envisioning process looking to see what the stock would have to do in order to pay you off. And so I would look at this level as an entry point, 312.87. But wait, there’s more. I took a position and I know a couple of other people, in our trading forum, did as well; I took a position on this here. We also had some back here but we got stopped out on a pretty tight stop, that’s trading.
But I actually took a position here. I am anticipating a breakout but I am not predicting it. But I am saying, “Do you know what, I like the way this is trading. The market is kind of crappy, but this is holding up okay. So I think I am will take a little bit right here, I will give it about 3.5 percent room to the downside, maybe even just down to 299.00. Not much at all, but a small position.”
And what does this do? Well, it’s not going to make a big difference in my P&L. It is not like it is that big of a deal, but it is going to get me involved, I’ve got a piece of the action here. It is going to get it in my account to where I am looking at it. But what I am not doing is looking at the dollars that I am making or losing. I am looking at it with respect to the percentage that I am up or down.
That is typically how I sort my positions in my account. I assume and I make darn sure that my position sizes are correct. So I don’t have to worry about the dollars. Instead, I will look at the positions and say, Okay, on a percentage basis, which one is up the most? Oh crap, this is down 5 percent, that doesn’t work for me. What am I going to do with this stock? That type of thing.
It is something that I will be using in order to monitor my own account and my own activity to make sure that I am staying on track. These are just things that I use, they are not things that you have to use. Feel free to take them or leave them as you wish. But in either event, I would still take Meta ( NASDAQ: META ) over Mattel ( NASDAQ: MAT ), any day.
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