Can I get an F and a G? We’re looking at FB and GOOGL tonight and I’m telling what Cramer didn’t. (March 05, 2019)FB GOOGL AMZN
Cramer featured my work on Mad Money tonight so you can definitely check it out. But I thought I would go through these charts again just because nobody can do my work like I can do my work so I thought I would mention this to you.
I think that there are two benefits to following these stocks. First of all just to trade, hey, buy low sell high. But second of all, think about the FANG stocks as being these stocks, I am talking about Google ( NASDAQ: GOOG ) and Facebook ( NASDAQ: FB ) right now; Amazon ( NASDAQ: AMZN ) as well, Netflix ( NASDAQ: NFLX ) not so much right now.
These are stocks that no trader or money manager is going to get fired for buying Facebook ( NASDAQ: FB ); the same thing with Google ( NASDAQ: GOOG ). These stock have had a heck of a retracement. Facebook ( NASDAQ: FB ) fell from July to December and then it is up 50 percent from this retracement, plus it is at the 200-day moving average. So you look at a 50 percent retracement plus the 200-day moving average and that is where you would expect the stock to roll over or at least pause. And hey, you know what? It kind of did, it did for a month. It rallied up here, 50 percent retracement and then just drifted sideways. So this is kind of like the second thrust. A nice move up and then a pullback, now we are looking for another move higher here.
This is the way I would trade Facebook ( NASDAQ: FB ): I am long Facebook ( NASDAQ: FB ) right now in stock and options. I would be long Facebook ( NASDAQ: FB ) but I would give it a fairly tight stop here, this is as a trade. If you are an investor then here is what you need to look at; the stock is making higher lows, sideways, sideways, sideways. Look to buy it here, probably at some point it can go up to 200.00 but if this fakes out, pulls back, well guess what? This is your opportunity to get it even cheaper. Again, you are an investor. But if you are a trader you need to have some risk protection here and that would be just keeping a stop, say, just back below the 200-day moving average.
Now, Google ( NASDAQ: GOOG ) is giving you a similar situation here. You can see the stock rallying, higher lows. This today was a breakout that held above the February high. We finally got a move above the February high; this takes it back to a level that we didn’t even see since October when it was on the way down. So this is kind of a complete reversal. And similar to Facebook ( NASDAQ: FB ) I would say you have got to keep a trailing stop on this. You could keep it just below this trendline; just keep walking it up there or even have a tighter stop.
In this kind of market I like to have stops that are two days back, just below the low from two days back. This is the low from today; this is the low from yesterday. And so yesterday’s low is 138.25; with this so close to the 200-day moving average I don’t want to put the stop right at the 200-day moving average so I will just put it a little bit lower than that. This is where you buy Google ( NASDAQ: GOOG ) right here. And then you keep your stop here just below the 200-day moving average and that is how you trade that.
And then the last one is Amazon ( NASDAQ: AMZN ). Seriously, do nothing here. I have a trade on this, I will tell you what it is, it is basically a delta neutral trade. I am short calls and puts on this and that is for another video. I am not really expecting much out of it, in fact, I am expecting the stock just to kind of grind around here. If it ever breaks out above the 200-day moving average then that is known as a good thing. But until it does that I literally look at this thing like it is in jail, it’s just right in there. As long as it stays there that’s fine and then at some point it is going to break out and that is when you can buy it.
So wait for these stocks to be above their 200-day moving average before buying.