Coke's post earnings release swoon is now a thing of the past - with the stock roaring off 40 dollars and heading back towards 45 - a ten percent move in a few short trading weeks. Can anything stop this bull market if companies can miss and still not stay down?
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It's starting to look like Google wants to see lower prices (the trading instrument) - the buyers simply aren't there and the biggest energy days are by far the down days. Can the stock regain the 50 DMA and then the 200?
There are new highs almost every session and the S&P 500 seemingly can't be stopped from the historic run it's been on for the last month. The bears simply can't make any sell-offs stick and all mini-downdrafts have been buying opportunities for a long time.
Who says moving averages don't matter? Just take a look at this chart and you'll see clearly that *someone* must be paying attention to these 'lines' because McDonald's stock keeps failing the red line AKA 200 DMA - What's next for MCD? I'd say lower pricing unless the stock gets above the red line. Simple as that.
The recent run in Apple is turning into a momentum frenzy, with the stock 20 points in less than a month. That's an absurd move for a company this size and is a warning sign: DO NOT CHASE. Please - don't get in the way of the momentum players.
Why do I watch the market every day if I'm a long-only investor? Simple answer - do you pay any price for the items you want at the Supermarket or do you watch for the sale items? I don't want to pay regular price.
So, I have my list - and I watch constantly for the names on that list going on sale. The best value in my portfolio right now is Google - trading well off its recent highs. Today - it's down again - and looks as if it wants to test recent lows. Will we get another shot at this stock at 520? If so, will 520 hold? Apple is the biggest company in the world and as many that have followed this blog have figured out - my number one stock recommendation and top holding and it has been for a long time. It goes a long LONG way back to my childhood and having Mac computers in the home - I'm not a bandwagon fan of this company and advised buying it at much MUCH lower levels several years back (notably at 200 pre-split)
Now, of course - the big question is what to do NOW. There is no stock people ask me about more often. So, today - I'll run through the short, intermediate and long term view of this stock and what to do now if you, 1) Own a lot - 2) Have a small position and are looking to add more 3) Have yet to start a position in Apple First off - We'll start with the Long position - I think Apple is the must own in any portfolio, protected from any tech trend variations by its massive cash horde. I advise owning two tech companies - and Apple is one of them as well as Google. There are other techs I've owned, but due to pricing - I've dropped MSFT from the portfolio. Second - Intermediate term - Apple's been on a big run, but still trades at only a slightly elevated Price to Earnings ratio or - PE. Therefore, I think there is upside in Apple in the next 6-12 months. I rate the stock a buy at current levels with the following caveat - do your best not to BUY at current levels because of short term view. Third - Short term - Apple is extremely overbought - on a crazy run. The stock has gone from 95 to 114 in a MONTH. The biggest stock in the world (by Market Capitalization) shouldn't move that much in a month. It's simply nuts. Therefore, I advice in Apple 1) If you own a lot of Apple - TAKE PROFITS. That's right - I said it - hit the cash register. I'm not saying sell your entire position, but please sell at least a small portion of profit. 20% of your shares in the least. 2) if you've bought a few shares near the highs and wonder if it's the time to add more - based on the charts - I say no. There is ALWAYS a pause - look at the bottom chart - the 5 year - see the massive sell-off that happened? Wait for a change in direction. 3) If you have NO position at this time in Apple - I simply advise you wait for lower pricing to begin buying. The run Apple has been on is simply historic and will not continue forever. No stock just goes in one direction all the time - see again the 5 year chart. In conclusion Short term - sell for profit, hold, and wait. Don't rush into the stock at 114. Intermediate - look for profit-taking sell-off to enter stock. Long term - must own core company for a portfolio. After a bit of news in the morning of entry of activist investors into the stock, McDonald's is up sharply in early trading. However, the 200 DMA looms, where the stock failed in the last attempt to recover from the sell-off. Just as I've said for other stocks - a stock can't and is not in an uptrend/bull market if it's below it's 200 DMA. So, until MCD gets above the red line- it's still held by the bears. However, the stock is right at that 200 DMA - on a Friday session - if it can get above it - that would be bullish.
I've been following the price of oil all the way down the slope - I thought when oil broke 84, it was in trouble. but, no, I never saw this coming. Multi-year lows in both Brent and West Texas crude oil have been reached. Where will the bleeding stop?
Google has rebounded from a vicious sell-off, but the inability to recover the moving averages has led the 50 DMA to roll over the 200 DMA. On the chart - you see it represented by the blue line pushing below the red. When your short term direction falls below your long term direction - you get an important inflection in the stock. Google has made a series of lower highs and is now poised to make a fresh run at the recent lows if the 50 DMA isn't eclipsed as it falls. However, I view this as temporary momentum selling and I haven't changed my opinion on the company one bit. It earns bucket fulls of cash and should be bought on any weakness below 550.
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