Want to make the big bucks? Know when to buy. Let’s look at TWTR, GRPN, AAPL, TSLA and NFLX./ (..Discussed in this article: Twitter Inc ( $TWTR )
We are looking at Twitter ( NYSE:TWTR ) here. This has been a stock that has been really strong the last few days, particularly noteworthy, at least to me, was when it broke out; this was just yesterday, on Monday, when it broke out above here. I just wasn’t watching it down here, but when it broke out above this high of 46.35, I’m pretty much all over that.
But I want to talk about, not really so much day trading, but really intraday dynamics. Because I think that a lot of you probably day trade a little bit more than you think you do, and a lot of you maybe don’t do it as well as you think you could. Here’s what you’ve got to know, this is the 5-minute chart, but let’s go back to the daily chart. Okay you can see Twitter ( NYSE:TWTR ) had a pretty big move today, up almost 6 percent, and you say, “Golly gee you know that’s a pretty big move from $49.00 up to $52.00, monstrous. Look what it did yesterday, same kind of thing. But if we look at the intraday chart what do you see? You see a stock that when it takes off, every stock obviously is not going to do this, only the ones that take off in the morning; when the stock breaks out look at how steeply and quickly this thing climbs, we’ll go out to here.
Okay this is within the first hour, hence Dan’s 59-Minute Trader, but this isn’t about the first hour that the stock made the climb, the rest of the time it didn’t really pull back, I mean look, the high of the day was what, I don’t know, 52.50 or something like that. Well the stock closed at $52.00, so it’s essentially traded sideways all day. But here’s the thing, if you haven’t been trading very long or maybe you haven’t been trading this way, you’re going to sit here and you’re going to look at the stock all day long and you’re going to wonder if it’s going to start taking off again. Here it actually kind of gave a little bit of a fakeout, but if you realize what’s happening, what is pushing this stock higher, it’s really pretty severe buying pressure.
Well that buying pressure is not generally just going to keep going through the whole day. The buying pressure remains high-pressure until all the buying that was going to be done was done. So you’re going to see this a lot where first thing in the morning stocks move, look at Groupon ( NASDAQ:GRPN ) per se, same thing, you look at the daily chart, you see a really pretty nice move here. But when could you have actually made the money, when you bought at 10:30? No, when you bought at 9:30 and then it runs? Or course before that would be nice. But if you look even here on December 9th, yesterday, the stock ran up, it started down here at a little over $9.00 and ran pretty hard, and then trickled sideways for most of the rest of the day. Then it continued higher, fine, but that’s not my analysis, I’m really just talking about the mornings.
Okay, what about Apple ( NASDAQ:AAPL )? The 5-minute chart, okay first thing this morning the stock gapped down $3.00 or something like that, traded a little bit lower, and then started moving higher. Look at the NASDAQ, pushing a little bit higher at about the same time. The S&P pushing a little bit higher but then ultimately rolling over, so we’ll get back to Apple ( NASDAQ:AAPL ) in this same time frame. If you’re buying Apple ( NASDAQ:AAPL ) the move was made in the morning, it was done in the morning.
Similarly with Tesla ( NASDAQ:TSLA ), same thing here, first thing in the morning down to 139.00, up to 144.00, whatever it is; this was the big money. Now, ultimately the stock moves even higher, so you can say, “Well, you know if I’d sold here then I wouldn’t have made this money here.” Well that’s right, but you’d also been holding on, we’re talking short-term trading here guys, you’ve been holding on all this time through this pullback, which in the eternal scope of things isn’t that big a deal, 144.00 down to like 140.00, 150.00, not that big a percentage deal. But if you are looking at this time frame then this matters, kind of like this matters; again if you’re looking at this time frame. If you really just look at the prices, 144.50, 140.00, that’s $4.00 out of a $144.00 stock that is not a big move, but again, if you’re just looking at intraday moves, it’s kind of a big deal.
So if you like a stock, and you want to be buying it, frankly the best time to be buying it is early in the morning. If it gaps way up, starts to roll over, that’s a different deal, that’s generally not going to work. But if you just see a stock, let’s say you’ve been watching it in a volatility squeeze or something, and we can even look at Netflix ( NASDAQ:NFLX ), same deal; you like a stock, buy it first thing in the morning. Because if you’re buying it later in the day or in the afternoon, then what you really have to do is wait overnight and see if you get this kind of move again.