Pop Pop Fizz Fizz, Oh What a Relief it Is? Looking for a rebound on Monday in $FIZZ (March 08, 2019)FIZZ
Just a real quick trade here on FIZZ, National Beverage ( NASDAQ: FIZZ ). They reported numbers that, let’s just say, were a little bit flat, the carbonation could use a little work. The stock really traded down; let’s just say nastily. At one point it was down 25 percent. You can see the big massive volume, a lot of selling pressure. BUT the stock closed up near the very high of the day.
This is a trade tactic that we use a lot at Stock Market Mentor. Sometimes I will do live training sessions in the morning where we will trade the opening rotation, which means I have to get up extra special early because I am on the “left” coast. But here’s what we do: We will look at the intraday high here, 58.83, and say, “Okay, on THIS day the bears CRUSHED it in the morning,” and then the bulls probably ran most of the rest of the day.
Let’s see how this thing works. Usually it is first thing in the morning, big dump and this kind of meanders all day long. Big massive volume during the day, 471,000. You can kind of compare that to some points in the middle of the day where there are like 13,000 shares traded. Most of the trading took place during the first 5-minutes of trading and then the stock just kind of drifted up.
So what is this telling us? It is telling us that all of this selling is kind of done. The stock opened up right here and then it traded down during the first, again, 5-minutes. And then at that point buyers came in to push the stock up. So you get bad selling here first thing in the morning and then buyers pushing the stock up and now we can expect the stock to at least try to fill the gap.
I am not describing this trade as a gap filler; I have no idea if it is going to fill the gap. I could guess and then if I turn out to be right you’d think I am really smart. But I am not going to do that, I’m too smart for that. So instead we will do it this way: We will say if the stock rallies ABOVE Friday’s intraday high of 58.83 then we are going to see the stock at least try to fill the gap. This is a trade guys; this is a trade. The stock is well outside the Bollinger Bands.
Let’s see what happens if we even move this out to 2.5, oh, it’s still out. Let’s see what happens if we move it out to 3. So this stock closed more than three standard deviations below the 20-day moving average. This is almost mathematically impossible. It is such a black swan event it just doesn’t happen. So just from a function of math, this stock is likely to move up through 60.00 anyway. It will probably come up to 62.00 or 63.00. I was going to say the mid-sixties, but again, I don’t know.
Let me just put it this way, you have been watching this thing for 3-minutes and 45 seconds, it shouldn’t even take you much longer than that to make a couple dollars on this on Monday; how’s that? Also, if you are buying at 58.85 we’ll say, make sure you have a stop, have a stop down here. Give it literally a percent and a half, no more than that. If you are correct on this trade you should never be down than 1.5 percent. That is a pretty low-risk trade.