Summer is ending…but there’s still time for a dip in the $POOL (August 24, 2021)


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Pool Company ( NASDAQ: POOL ). Cool, it’s getting towards the end of summer, and do you know what? The swimming pools are still out there. This is the biggest company, it operates pool equipment, has supply centers, the whole bit. If you’ve got a swimming pool, and I do, you’ve probably done business with these guys.

The cool thing about this stock is, technically, it’s in a really strong position here. It’s in a really good uptrend, I would just kind of as a general proposition, be long this stock as long as it’s staying above the 50-day moving average, this just seems to be the trend. They don’t report earnings until the end of October so earnings are not an issue.

From a technical standpoint, I really think that this is kind of like your general buy zone, right there, somewhere in there. If you are looking at this, the 50-day moving average would kind of be continuing to drift up. And so if the stock pulls here a little bit it will be intersecting the 50-day moving average. And then at some point, it is going to lift off and go again.

As I look at this, this isn’t a super timing issue where I say, right now, hey, go buy this stock tomorrow. However, if you do buy this tomorrow your stop is right there, it’s like 2.5 percent. You are not giving this much room at all because if the stock falls below the 50-day moving average you don’t want to be long.

It doesn’t mean you can never buy the stock back, you are not getting a divorce, you can take it out on a second date, the first one didn’t work out too well. You took a vegan to a steak place, sometimes they just don’t like that.

The bottom line though is, this could turn out to be a really good trade but for now, it is just one to watch. By the way, from a fundamental standpoint, this company is doing awesome. It’s got what I call a 3×3, which means that over the last 3 quarters earnings, sales, and tax margins have all been improving versus the same quarter the prior year.

So it’s like you’ve got improvement and an acceleration in improvement. That’s a really cool thing, don’t you wish you could say that about your trading account every week, every month, every year? Trade like this and you will be able to one of these days, I promise you.

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