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I want to look at Sprouts Farmers Market ( NASDAQ:SFM )
today, and here's why. This really had some people, in the forum
today, commenting on this
right towards the end of the day. This is really conforming
to that IPO strategy, or pattern that I had mentioned
a while ago.
The stock printed and all-time high today
and it closed at an all-time high as well.
I love to see this; after a stock
trades were it traded here on the first day, comes up,
establishes resistance,
here's resistance right here.
So many times, not all the time, so it's not predictable, but it is factual,
it happens a lot,
so many times the stock will ultimately come up
and test that level and fail. Not necessarily
trade down again, but
a lot of times it comes up here and it will fail.
This is important for you to know because number one,
you don't want to buy here then, the first time a stocks coming up don't anticipate
the stock's going to hit an all-time high; well it ultimately did
two months later. So
don't be anticipating this in advance, because you're going to wind up being
wrong
more than you were right. Do you know why? Because
at the place where supply overwhelms demand,
with respect to aggressiveness,
price is going to go down, it's like a lot of reality.
That's exactly what happened here. So I'm looking at this
right now, I'm not buying it.
I'm not buying it because even though we pushed up higher
I don't have any convincing sign that this
is any different than that. Now, do I think the stock is going to go higher from here?
Yes, I do,
because I'm watching how this trades,
runs up here the first day, and then it's 0:02:20.970,0:02the :26.440 back there, and then it's back there, and so I'm just thinking, "Hey,
today's Jimmy Shaker day, this is the day that it's going to happen,
but I don't know that for sure." So let me
suggest how to trade this. Look at it on a 5-minute chart.
You can see it's been trading sideways
all day long, and then it
only ran up right at the end of the day.
Why? I couldn't tell you. They announced earnings last week that were pretty good
and so the stock rallied accordingly.
Now, with this, here's how you trade this stock,
you look and say, "All right well, most of the day the resistance was right around
41.50, 41.60,
something like that, so this is
all the after hours stuff.
You can do this in one of two ways: either wait to buy the pullback to about there,
my bet is you'll get it tomorrow. The markets going to probably be a little bit
volatile just because the nature of things,
but you get an opportunity probably to buy this stock
at or below 41.65. When you're doing that
you're guaranteeing that you're not buying at the exact high,
maybe you're taking a little bit of stock, at least you're using an intraday
chart.
Or, you can sit here and watch it wait and hope
you get more of a pullback. Another way to do it,
and it's a different trading style, but here I think it
actually is the one that I would prefer. Wait for it to break to a
new high,
42.51. So you put a price alert at 42.50,
42.55, something like that, and then
when your alert gets hit you say, "Okay, well this is now hitting new all-time
highs,
I want to be in this stock because I think it's formed a pretty nice base."
If you can just do something like that, it's going to help you make
a heck of a lot of money.