Take another look at a monster. (August 11, 2012)
MNST
I’m Dan Fitzpatrick at StockMarketMentor.com on Saturday, August 11th. We’re going to look at Monster ( $MNST Monster Beverage Corp ). As you know, if you’ve been watching this stock at all, they had a pretty horrendous quarter; nobody wants to buy this stock right now. So looks to me like, at least for the time being, and the time might be for a while, this growth story is not what it once was. The reason I’m showing you this is we just kind of like to look at these and get confirmation that the hope and faith strategy does not work when you’re trading stocks. Monster ( $MNST Monster Beverage Corp ) is one of these stocks that if you’re not careful it could be like Apple ( $AAPL Apple Inc. ) or one of these other stocks where you’re more of a fan than anything else; and you just think the story’s going to keep getting better and better; Apple ( $AAPL Apple Inc. ), you know maybe so, I’m just saying there’s a lot of Appleonians out there that just think any little three dollar pullback in Apple ( $AAPL Apple Inc. ) is a great buying opportunity and maybe it is, but here on Monster Beverage ( $MNST Monster Beverage Corp ), this was a stock that we could see, if we want to look at the money flow here, we could see the money coming out of this stock; there was no negative divergence as the stock came down the money flow indicators coming down as well. So when you see that type of thing it pays to pay attention to it, compare that, this decline here in money flow as well as the stock versus back here when the stock was trading sideways. What was happening with the money flow? It was actually moving higher and you know we can quibble with a lot of things like, “Oh yeah well here this was moving lower,” and you could see how the stock was just trading sideways and it ultimately popped higher. Great! That’s why I don’t just trade off of money flow, I trade off of price but this kind of stuff is pretty important when you’re really trying to get a sense of what’s happening with the stock. So what I’m saying now is, is Monster ( $MNST Monster Beverage Corp ), is it time to buy the stock now? I mean after all how far has it come down from the top? Thirty percent; look at the weekly chart and I’ve got to say, “No,” because the stock, if you look at it relative to the 40 week or 200 day moving average, this was the extreme, look at the distance between the top of the stock and the 40 week moving average. We can go that far down to the downside here before I would say, “Okay, now the stocks corrected too much to the downside;” I’m not saying that’s going to happen but what I am saying is I’m not looking at Monster ( $MNST Monster Beverage Corp ) right now as a monster buy. I think there’s so much pain, so many folks that are upside down on this stock, but it’s going to get sold into on any kind of strength and in fact if it pushes up to the 200 day moving average and then falters; I think that’s a pretty good time to fire off a short on this thing. Okay members, get over to the Weekend Update; I’ll see you there Free Chart