3 Stocks I Saw on TV (AMGN GRPN FB) (July 27, 2016
Every night we watch the same shows, Fast Money and Mad Money, and we want to USE those ideas the grow OUR money. Well good trading takes more than just pushing the buy button, in the morning, to get the stocks you saw on TV last night into your portfolio. I’m here to help you MAKE money on THESE 3 stocks I saw on TV. We’re doing earnings today.
Amgen ( NASDAQ:AMGN ), reports earnings, they beat estimates, stocks down. Here’s what happens when you pull the trigger: You get these really itchy trigger fingers. It closes here, they report earnings. Immediately the reflex is, Boom! They beat earnings, I’ve got to buy. Volume, 3,000 shares, there’s somebody out there pushing the buy button, and then the stock settles back in. And frankly, honestly, truly, it doesn’t even matter why. If you’re a fundamental guy who’s really looking to see all the nuances, you’re not watching this video, you’re studying spreadsheets. And good for you. You can do whatever you want in the time that you spend doing things other than making money.
For the rest of us, lets look at the chart. Weekly, sideways consolidation. There’s really nothing in this price action that negates that consolidation, this channel. In other words, we’re poking out the upside, but what this is really doing is, it’s giving us a reference to look for as support instead of resistance. Resistance here, resistance here. So now we’re out here, so wonderful if Amgen ( NASDAQ:AMGN ) continues to do that. Really bad if it does this. So here’s what I want you to do: I want you to keep an eye on this level (170.68). If the stock starts trading below this level I don’t want you to buy this stock. Just consider it a busted, fake out, and get out of the stock. If the stock stays above this level, then you go ahead and take the stock. But the catalyst is now behind us, the votes are in, and it’s a vote, slightly, for the bear.
Okay, Groupon ( NASDAQ:GRPN ) reported earnings, they lost less than expected. So Amgen ( NASDAQ:AMGN ) beat estimates. Groupon ( NASDAQ:GRPN ) lost, but just less than anticipated. Their revenues were 756 million as opposed to a 711 estimate. Lets look at the intraday here, unlike Amgen ( NASDAQ:AMGN ) this thing rocketed up and there is basically no trading going on now as I’m doing this, it’s 40-minutes after the market closed. But the stock is really holding here. Here’s what I want you to keep in mind: 20 percent of the float is short. So you’re seeing a short squeeze here and you will continue to see a short squeeze.
What I would suggest doing tomorrow is, I wouldn’t buying this stock at the open. I just can’t. If the stock continues up, 5, 6, 7, $8.00, you can say, “Fitzpatrick, you don’t know squat.” And you would be right I guess. I’m just saying, a stock that’s up from 3.78, up to here, it’s up 25 percent. That is not a gap you want to chase. Frankly, even if you’re short, don’t cover. That’s pain happening right there. Look at this as resistance. I would stay clear of the stock. IF, though, the stock starts trading above $5.00, now you’re a momentum guy, now you’re jumping on the backs of the shorts. You’re making money on this short squeeze. Go for it. But use $5.00 as your line of demarcation. It’s at 4.74, it can go up to $5.00, another 5 percent. Great! So you’re buying now. Very high risk buy. You KNOW the stock is at least going to pause at $5.00, it’s a logical sell point. So you’re chasing this stock up 20 some percent just for the possibility of making 5 percent before the stock definitely hits a ceiling. That’s not a good risk reward for me.
Facebook ( NASDAQ:FB ), reports earnings, crushed estimates, they always do. Look at the 1-minute chart, you can see what happened here. A big move higher, it’s basically staying there. Now you’ll see a lot of price targets being raised tomorrow. If you’re an analyst it’s kind of hard to say, “Oh, well I’m reiterating my buy rating.” They do it all the time, because they’re not very creative. You’ll see a lot of price targets raised, everybody’s already got this as a big buy. I think you’ve got to look back, zoom out, look at the weekly chart, slide this thing over, draw some lines, this is the trajectory that you’re looking at.
So by mid 2017, the way this is going, I don’t see why you can’t expect $150.00. It doesn’t seem like that much right? Well this is a weekly chart, you can trade around it because so far it just continues to oscillate in this pattern. And a pattern remains intact all the way up until that magical moment in time when it doesn’t. So far you’re good here. Would I chase it? No, don’t be chasing it here. This stuff almost always comes back. Look what happened here, big gap up, drift sideways and then ultimately a pullback. If you had bought here at the open, you weren’t really making money. Here, same thing, and then a big pullback. This WILL come back, it might not be tomorrow though.