After disappointing earnings a couple of weeks ago, Veeva Systems (VEEV) is breaking out! Here’s your trade. (June 04, 2018)


I was on CNBC today, Power Lunch, talking about a healthy market and I do think this is a healthy market. I am not one of those guys that is always pounding the table irrespective of what the market is doing saying, “Buy, buy, buy. Oh my gosh, things are awesome.” No, I am not that guy. I look at the trends, I look at markets, I look at psychology and I think a lot.

What I am seeing here in the overall market is there is just a cap on these gains for various reasons, which I go into in that piece and I mentioned in notes before; which is, we have got this toxic political environment and it is keeping people from getting all lathered up, at least in a good way, not in a bad way. People hate each other; you’re ditching brothers and sisters and moms and dads; used to be friends and this and that. We have never seen it so bad.

With respect to the market that is actually a good thing because our numbers, our economic numbers, our data is really, really good. If everybody was walking around in a good mood; they are so happy with our administration and, Oh my gosh, this is great, look at these numbers, we would be S&P 4000; I mean it would just be ridiculous. I like the toxicity, frankly, because it is creating a base here. It is giving the S&P ( INDEXCBOE: .INX ), and all the major indexes are kind of doing the same thing. It is giving them a chance to build bases. You can see the Small-Caps and the Mid-Caps, they are actually already coming out of their bases; the momentum is coming back, right?

So remember, the next time somebody starts yipping about anything political, whether it is “yea or nay”, it doesn’t matter who they are rooting for, think to yourself, I hope they are really, really getting emotional because I want them worried. I want people worried because the data is looking good. When the data is looking good know that the Fed pays attention to the data. They don’t pay attention to the news; they pay attention to the numbers.

That takes us to Veeva ( NYSE: VEEV ) here. Veeva ( NYSE: VEEV ) had a clean breakout today above $80.00. Earnings aren’t an issue, that is in the past, that’s a couple weeks ago, back here. They beat their earnings estimates but their revenue growth is slowing and that is why the stock, big choppy volatility stuff here and then the stock kind of sold off and nobody cared, now the stock is up higher.

So with this little walk down memory lane over the last 5 or 6 days of trading you can see how I would say this is a stock that you can buy pretty much right now. Keep a stop on it; the 50-day moving average you kind of have to give the stock quite a bit of room if you are stopping it out that loose. I would say you keep a stop here around 78.50 or so to build a position. If the stock pulls back and stops you out then you were wrong to buy in the first place because this breakout turned out the be kind of a “fakeout”.

Ultimately Veeva ( NYSE: VEEV ), this is one that we have been on for a while as you can see. But this is a stock that I think is going higher; it is looking to me like $80.00 is now support for this stock. I would be a buyer of Veeva ( NYSE: VEEV ) right here and then if the stock starts to continue higher then you go ahead and add to that position at a higher price. Then use a trailing stop, a separate trailing stop, for that second position so that you are not taking on more risk than you planned to.

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