Is Cree (CREE) still shining brightly? The CEO was on Fast Money today. Here’s my take…. (March 11, 2013)
QCOR
I’m Dan Fitzpatrick at StockMarketMentor.com on Monday, March 11th. I want to look at Cree ( $CREE Cree, Inc ) today. Just a little while ago the CEO of Cree ( $CREE Cree, Inc ) was on “Fast Money” talking about how they’ve basically got the company and the industry off high center and he thinks they’re in the sweet spot to move forward. The question is, I mean that’s fine, so maybe this is the time that you want to go see if you can get a job with Cree ( $CREE Cree, Inc ). But, as I’m looking at the chart, this is a stock that’s just scary. A lot of folks will look at this chart and say, “Oh my gosh, this is a beautiful chart, look at this chart, it’s such a beautiful chart, I mean you can see this nice bowl pattern here, oh, it’s such a beautiful chart.” Well yeah, if you’d bought here, or here, or even on this breakout at $35.00. By the time the stock is up to here, this is not the time to be getting long this stock; it’s the time to be taking profits if you are long. Showing up on “Fast Money” after the stock has made this kind of move, not before, but after the stock has made this kind of move, showing up on “Fast Money,” in my mind, almost makes it more dangerous that it’s a top, because what are they going to do next? Be interviewed by Leslie Stahl on, I don’t know whatever show she’s on that nineteen people watch. What I’m saying is, the stock is already so extended that I don’t really know what the next catalyst is that’s going to push the stock higher versus cause it to drift sideways or even lower. Now, notice I’ve been talking about the weekly chart. For you more aggressive traders, hey, follow me. Now we’re looking at the daily chart, volatility squeeze, right here, boom! Big break out. Okay, this is really kind of conforming to our three-part volatility squeeze, you know, breakdown or analysis that I do. First of all you’ve got the squeeze itself, the breakout, out of a Bollinger Band squeeze, that’s phase one. At some point the stocks going to peak, perhaps that was it last week, we don’t really know yet, but if it does, then we start phase two, which is the pullback phase. It could pull back a little or it could pull back a lot. We wait for this phase two to run its course and then the first positive day, after an identifiable pullback, the first positive day we put a stop underneath that intraday low and trade into phase three, which is a rebound to the up side. Right now I can’t really say whether this stock is done going up on this initial phase one. But if you are an aggressive trader, and only if you’re an aggressive trader, go ahead and buy this stock right now, just keep your stop a little bit fifty-one’ish, something like that. If you’re an uber-aggressive trader then you want to look at, say, Friday’s intraday high, $53.35, is that the high of the week? Yes, $53.35. If the stock hits $53.40 that is your momentum breakout, that’s your breakout, you go ahead and buy that stock even though it’s up like this, even though this chart is just, like ugly. And who is it ugly for? It’s ugly for the folks that were shorting it and it doesn’t have that high a short interest, and it’s also ugly for those, like you, who may be wanting to enter but you realize this is a really, really high risk trade to be trading right now. I think you basically want to steer clear of this stock, unless, again, if you’re one of these guys or ladies that likes to run around with your hair on fire, there’s your buy point, right there, just make sure you manage your risk. Okay members get over to the Strategy Session; I’m going to start actually, with the couple short squeezes that are happening right now that are pretty much going to print some money here, at least that’s my view. So get over there and check that out today. A little bit different format over there than we usually do. Free Chart