3 STOCKS I SAW ON TV (BIIB FIT FB) (August 02, 2016)
Every night we watch the same shows, Fast Money and Mad Money, and we want to USE those ideas the grow OUR money, right? Well good trading takes more than just pushing the buy button, the next morning, to get the stocks you saw on TV last night into your portfolio. That’s kind of a recipe for disaster. Well I’m here to help you make money on THESE 3 stocks I saw on TV.
Okay, we’ve got to start with Biogen ( NASDAQ:BIIB ). The reason is there is there’s conjecture, you can read about it, read all about it, that they might be bought by Merck or Allergan. They’re interested, right? So the stock is up and they’re yipping about it on Fast Money. I don’t mean that in a bad way, they’re just talking about it on Fast Money. And then just about 5 minutes after they were talking about this possibility Allergan comes out and says, “We’re not really interested, but whatever you want.” So what happens? The stock starts tanking. You can kind of look and see exactly when this happened. Here’s my point: A good company, obviously an acquisition candidate. But the fact that this stock is up so much and then it falls because one of the potential acquirers says that they’re not really considering it, this is a stock that is now up ON, not on valuation, not because it’s a cheap stock or anything like that. It’s just on conjecture that it’s going to be bought.
I would say steer clear of this because typically these things don’t work well. They don’t work out well. It’s not like it’s a secret, “Guess what? Only the people that watch Fast Money know about it.” Just steer clear of this, it’s a crap shoot. And by the way, if it’s going to happen, if somebody is really looking hard at it, with this kind of move, think Gordon Gekko, they’re going to have to make a move quick before this thing goes to Pluto. I just don’t want to be on that ride.
Okay, Fitbit ( NYSE:FIT ). They reported earnings after the bell, it’s up a bit. The thing is, and they were talking about this on Fast Money, it’s not a compelling valuation at all, but I’m not a value guy, not my deal. I just look at trends, and right now this trend is sideways. The stock is locked in jail at $14.00. Very high short interest. Here’s the deal: The stock is up today, the high was at 13.98. I would rather buy at 14.10 than 13.90. Because, if it’s up at 14.10 there’s about 35 percent of all shares that are getting really, really nervous really, really fast, because this is a high short interest. Other than that, it’s just got a sideways consolidation that isn’t exactly interesting, So if it’s breaking out to about 14.10 hop onboard, squeeze the snot out of those shorts (sorry for the bad visual). But otherwise it’s just still not working.
Then the last one is Facebook ( NASDAQ:FB ). Another one that they are chit-chatting about on TV, which is what this is all about. This is where the stock went to when they reported earnings, 128.00. Now it’s back down to levels where it was before they did report earnings. I think this has further to fall just from a technical level. Facebook ( NASDAQ:FB ), you can’t argue with the trend, but here’s what I can argue with, really, is the entry point. This middle Bollinger Band or the 200-day moving average has characteristically been the best place to buy. What has really not been the best place to buy is somebody above the middle Bollinger Band.
So my point is, this isn’t a great time to be buying this stock. I would let it come in a little bit more. If it falls below 120.00, that’s when you should take a look at it. But right now, forget about the fact that it’s Facebook ( NASDAQ:FB ), it’s a chart. By the way. I hate Facebook. Sorry if I offended you but I just had to say that. Really? Get a life, play Pokémon, not really. So this gap up, on such heavy volume, this is a problem for this stock. It’s kind of a capitulation buy. You’ve got to just wait for a pullback longer. Because I don’t see a catalyst for this going from here like, “Oh, this was an awesome buying opportunity, screaming up to new highs.” I don’t see it. And if you don’t see that and they have just reported earnings, then let this stock settle in. People will get tired of it. It will ultimately settle back to a better buy point. This is just not it.