Technically Speaking: Trading the Trend | Long-Term Stock Investing |4-18-19
You. I'd. Like to welcome you to technically. Speaking on trading, the trend weeks to months my name is James Boyd today's date April 18th we, welcome you here today uh hopefully. You're getting ready for that three-day, weekend, okay but let's finish strong here for, this afternoon, don't think too much about this weekend let's think right now and, great. To be with you here today hopefully, you're enjoying yourself, today and wherever. You are it's nice and sunny Salt. Lake City has finally got nicer out and. After. Seeing the large boat and the animals coming out the other day. It. Was just torrential. Downpour, the last couple days it is nice to actually see. Literally. Some Sun and blue sky so. Welcome. Here now just real quick before we get started I normally teach this class at on. RSA, on Wednesday. And Thursday. And so. This class and, I teach many other classes throughout the week and I will show you the schedule, first. Thing to remember remember, that options, are not suitable for all investors there's special risk inherited trading options please. Read that previously provide a copy of the the. Characteristics. And risk of standards, options, there's, not a whole lot of pictures in there page 59, is your only table in there everything. Else is words but, it is actually good that you go through and read it other, thing, is remember in order to demonstrate the function we, will use actual, symbols, we do have a paper money portfolio, we trade out of but, remember that TD Ameritrade does not make any recommendations. Or determine any, security. Or strategy, that is up to you decide what you want to invest in our comments. Day will be on stocks, and options so. We'll probably do 50/50, on there now remember when we talk about options, we'll talk about God the, option Greeks delta gamma vega theta, and. So keep that in mind know. How that pertains to your position, now, we're. Going to actually really talk about the real. Lesson, for really. Based on long, term, investing. Now. If you kind of think about this we hear comments, all time the trend is your friend okay you sure hope so right if you kind of think about how you make money in the market the. Longer, you can hold on to a stock that is trending the, market, between appreciate, that portfolio if it's trending, so, those trending, ones are very, very important, to actually find and. Try to invest it in the portfolio if we choose to take a position we're. Going to talk about stocks, really looking at the weekly charts and the daily charts and really. Realized. The purpose, of attending, moving average now the reason I bring up the ten day moving average is that a friend and I knew about fifteen years ago I saw him the other day one. Of the first comments, out of his mouth he said is because James. Do you still look at stocks above a 10 day moving average and I kind of thought that was funny because, it was 15, plus years ago when I hit my friend and I sat down we, kind of talked about the importance, --is of moving averages, so we're going to emphasize that as we talk about trends as well well. Take a quick look at the index and the sector's will, talk about portfolio. Update, considerations. Quickly. And then, we're talk about some long-term setups. And we're, going to look at them from the perspective of weekly, and daily charts, I will, teach you an intermediate, level if I. Go too fast, say hey James could you repeat that don't. Worry I won't mind some. Of you will get that and then. Tools is we'll, be using the platform what, you see right here and the, learning outcome I want, you to do is you. Should be able to identify a, weekly, chart setup, of a, bounce or a breakout I have some examples, prepared so, I'm going to kind of show you some examples, we'll look at with that in mind then. Identify, a short-term. Setup from that and once. We find some examples, that are based on weekly charts what are look and see if the stock is outperforming.
The Sector. In the index so. That is called relative. Strength. Now. I'm going to tell you if you look at most people that have performed with the market or outperform, the market it. Really comes back to they're probably in areas, that are outperforming, so. Know, what you're invested. In. Hello. Bill Brock rich Chuck, Diane. And everyone. Now let's take a quick gander at the market our comments. Will massively. Change from yesterday you're, going to kind of see that a small. Green, candle. Here today on the SPX, no. Major change, the, S&P s broken the resistance, not yet we. Still see that green line right there that, is our 10 day. Exponential. Moving average, price. Still above that about. 5 SP, points here today about two tenths of a percent no, major change on the SP the. Nasdaq, was the area that, actually got above resistance, if we're talking about relative. Strength, and why. Don't we just hit that while we're looking at it but. What you're gonna notice on the relative strength so we're looking at the Nasdaq okay, the MDX and what, you're gonna notice is this, blue, line and I'll put a little arrow right there that blue line that. Is the Nasdaq. Performance. Compared. To. Okay. And that. Flat, red line, is the SP. And what. You're going to notice is and how, we read, this is. The blue line is. Actually. Getting further and further and further away from the benchmark. Which. Is what well the benchmark, is the, S&P. 500 or what we're comparing it to okay. And, so what that's actually saying is the, performance, of the Nasdaq, is getting further and further, spread. Away from or diverse from or God, creating. Positive, alpha if you want to crying out loud call it that you're. Actually seeing some out performance, relative to the benchmark so. You're gonna see that the Nasdaq. Still, actually staying above really the, old high maybe, trying to turn old resistance, in the support we'll, see if that continues. Volatility. Mix. We. Saw a hammer candle, on whoops. On the, VIX yesterday, not, really, seeing a follow-through to that not. Quite yet but, long, tail, yesterday, Dow. Jones being a little bit stronger here today. 126. On the Dow Jones about, a half a percent if. We look at this chart and zoom in what you will notice is today. Is if, we, close here close. Above, the high of the low day okay, and that's. Better. For actually, the Dow Jones we. Will take a look at a couple douse stocks, we've. Talked about Nike we've talked about Apple, and Mickey D's. Cetera we might see if we can't talk about one or two more okay, now. When we actually just quickly look at from the sector, perspective, I didn't. Really see any major changes. But there, was something, that I didn't notice today that was a little, different and let, me tell you what it was at.
The Very top you actually see that we saw I, X. I which is industrial. Some of my comments, here today are gonna be based really on the the that sector, of industrials. And transportation. Yesterday. In class we showed an example was, was, not a recommendation, we, did the example of KS you want, to talk about the choo-choos or. Railroad. Stocks to. Choose but, we'll bring those up but, we do see a little movement, here in industrials, and you're. Seeing that continuation, still. On. I X, Y. Ok, still, moving i XT. Still. Grinding, away iooks. Em. Down. Here today but, no major change, but probably. The one that's been a little shocker, has. Really been the staples, so, discretionary. Technology. Those have been the out performers, okay. Second. Probably. Even throw in there with. That staples, another. Push here today is probably industrials. Okay the, reason why we're looking at the sector's we want to continually, ask ourselves are we in, those areas that are outperforming all. Right now, let's kind of quickly talk about portfolio. Update. Considerations. Now let's move to two so. One of the areas that we might need to administer to as bill. Would say is. We're going to go down to the short puts now. Do. You like to practice. Short putts or the, selling, of putts well, this is a what we call a positive. Delta. So. In other words we're directionally biased, and that's. Dynamic it will move theta. Positive, trying. To make money from time decay okay, and it's, also what we call short. Vega. In other, words if volatility, were to expand, it would be not, good for, okay so, now, if you take a look at this what you're going to notice is we. Have one two, three, four five, we have six, positions, now. I was kind of thinking about this earlier you're gonna see that this I, want, to make sure we follow through, you. Know in class we have done, a short put on Boeing, I I, still, don't have anything to say to this because. It's just kind of waffling. Around right, where we did it you're, gonna notice that when we sold the put it might have had a delta, between 30 to 40 you're. Gonna notice that right here the delta is now, at. 40. Okay, so, it really hasn't changed, so. If the Delta is pretty much where it was when you sold the put the. Profit. And loss or, the unrealized.
Profit Or loss is, probably. Pretty close, to break-even, it, is so, no comment, really I'm Boeing there's nothing there now. If I. Go, actually down to an area of really. Microsoft. Okay, you're. Going to notice that we did an example, of one, put, short, to put the 110, and what, you're going to notice is here today is. We. Have the 110 put we're short that zero days expiration, because today's expiration, tomorrow. The market is closed now. What you're going to look at is here is the. Current stock price is at 123. Okay. Whoops. 123. And the, strike here is 110, so, what at 123. The stock is the strike. Price is at 110, you're, going to see that the marked value we can make a little. Half, of the penny or, $0.50, now, option, number one is if it's a short put. And. It's. Less, than 50, cents, excuse, me five dollars five. Dollars. We. Can buy it back Commission. List on the short option. Option. Number one option number two we. Can actually just say look we're $13. Away today's the expiration we, don't need to do anything we, can capture that one. Forty two and a half just. For the sake, we're we're not gonna pay a commission anyway, less, than five dollars if, we can buy it back for five dollars or less we. Can actually buy it back we're gonna buy it back for about a penny what, we're really doing is getting, our buying, power, back, okay, so, I'm going to actually say by plus, one in this. Example I'm just gonna say look I'll buy it back for, a penny so, we sold it for about 143, it's down to one, penny trying. To make that difference there now, if that's what we want to do what. You should see here is it's going to show a commission. But. Really, if, it's less than a nickel or in other words five dollars, on the, option, should. Be commission, less okay. And you're, gonna see we're paying a dollar, there's, the Commission but this is paper money and now. What I'm gonna do is if this is what we want to do I'm gonna, send that order now. You're, gonna see that that gets filled and what happens, we, lock, in those gains okay. Unreal eyes to realize we, get our buying power pack back. Because. We don't have that obligation. Potentially. To, buy the shares of the strike price now one. More I want to kind of speak to just really quick so. One of the short puts that we held over. The earnings. Was. A stock, called Netflix, now there was a lot of pressure, you had Disney, come out with their new upcoming, streaming, okay, you. Had actually Netflix, who's we. Could talk about that but, you're gonna see that we held that short put all over the, earnings. Here now. The. One thing I want to kind of keep in mind is and the, question that always gets brought up is James. Do. We have to hold down to expiration, now you might, know, someone, that says James I have a goal, to try to make X amount, of money per, week now. Do you, know anyone that has a goal like that that.
Maybe Tragedy's income. Strategies, for. Income, what, a shocker, now. What. You're gonna notice is one of our shorter term type of trades was no flicks and. What you're gonna see when, we actually take a look at this that. Was sold for. 14:35. Now. The. Mark value, right now is at, seven. Dollars and thirty cents now go. Back to that lag analogy. That we did yesterday this is a wet cloth, hypothetically. If, I put this underneath water and then. What happened, is they squeezed. It, as hard as I could, the, first squeeze the first fifty percent approximately is, the, easiest, squeeze there is to. Get to the sixty-five, percent, got squeezed harder to get to the eighty percent got a squeeze harder to get to the hundred percent I mean, you almost have to run over it with a tank okay. For hold down to the expiration, to. Squeeze all that premium. Out okay, now. If we, were trying to become, someone who is trying to make money. Income. Strategies, selling, puts cover calls things, like that we. Might say James all go, could be if we got thirty five percent of the option fifty. Five fifty percent, of that, short, put, premium, the average price when we saw the four this. Was fourteen, thirty five we are right, now within, striking distance, of. Fifty. Percent of the value, is. Gone. So. Our goal here is trying to sell high and buy low. And. Making. That difference now, do we have to buy a back now, no okay. Second. Option is if I wanted, to try to make income. Potentially. I can't. Even take that second, option and just say look right click on that line create. A closing, order and then, buy that back now. Here's the biggest thing is. Do. You have a goal for yourself, okay. Do you have a goal of maybe you're you trying to make so much money per week per. Month per. Quarter, do, you have a goal, okay. I'm, going to come back to them just a sec in this, example, we're going to actually buy that back in this example we. Talked about we don't have to but there's been questions lately on do, we have to hold expiration.
You Do not have to whether. We're short, the option, or long, the option, we. Can exit. Doesn't. Always mean we're gonna exit, for a profit, though if, I, say that I'm going to buy it back for 7:35. Now. What I'm going to do is go confirm, and send. That we're, buying it back for 7:35, plus. The Commission, and now. What you're going to see is there's the total so, when we've gotten into the position, fourteen. Hundred thirty-five dollars went, into our account what. We're now doing is, given seven hundred thirty-five dollars of that back and, trying. To make the, net difference, please. Include Commission's, to see what the percentage. Was now. If I say this is what we want to do we're. Now gonna send, that order and now, that actually fills, now. If, we. Take a look at this, I'm. Going to now, transition. A little bit now, by the way there's some other positions, like Nvidia like. Xilinx. That, are probably, going to be pretty close they're. Still kind of grinding away but, there's also some there that, might be closer to maybe certain percentage. Games etc, but. My comments, I just wanted to really hit Boeing. And Netflix, there as we did okay, now, and we also talked about Microsoft. So, that's kind of more the income. Portion, of our, portfolio we're, trying to make money from time to K that. Theta, right there is 80. If, we. Have 30, days go by and nothing really happened on these stocks 80. Times, 30, is. $2,400. Okay. Now. I don't know what a lot is for you or little or medium, that's. Some decent amount okay so. We're. Sold, the options, collected. The premium, the, theta is that day. Or, that, time. Depreciation. Of the, options, the, option Greek theta, does, that guarantee, that. We're going to get that money every day no because. If volatility, were to expand, it. Can. Some of the effects of that time. Decay, now, let's, now go down to the third part, which is we're gonna look at long-term set. Of examples, now. We talked, about an area. And one. Of the areas that we actually saw was ixi. Now. When, if the sector, is doing this there's. A better, chance that we, could probably find, stocks, in the, neighborhood. That. Are upward, trend now, could you think of any stocks that. Might, be upward trending, in industrials. Could. You help me here, help. A brother out here now. We might, think of well what is industrials, well, we. Might actually now the example, we looked at yesterday that was an. Example, what. We saw stock cashew, and it was example was a recommendation, you're. Gonna see that we saw stock, cashew, have, a classic. Cup. And handle pattern now, I'm deadly with this drawing tool but, what you're now gonna see is it kind of how to cup and I'm, all my goodness there has been so, many cups lately okay. It's. Unbelievable, now. If you take a look at this the cup is really just where the stock is really making higher lows higher lows, higher lows and it, puts pressure on the, resistance. Okay. And then, all of a sudden, potentially. Boutique. The, stock breaks out to the upside now that doesn't mean that it's gonna travel the width of the cup but, some investors, if other investors. See that they, might say hey I see the setup to now, Lisa. Actually says, caterpillar, so Lisa, is the only one, that. Knows about industrial, stocks please, tell me I'm wrong lisa. Is the only one that. Actually knows, about any industrial, stocks so. First off what you're going to notice is, caterpillar. Is a stock, where in the shorter, term what. You can see is yeah it. Is getting above an area, of resistance, higher. Low, light they're coming. Closer to earnings okay, so, Lisa that's an example we're talking on industrials, that, is actually also a shorter-term break, out of a resistance, area, and. Also I like where you're going with that is kind, of a pull back area, run. To the upside pullback this. Is just, like the cashew Chart, it's. Just the difference really is it's, kind of more of a shorter-term cup now. Let's. Take a look at this and I'm gonna look at a stock called John Deere and you might have heard of it before now. I don't. Know about you but. Cal. Some of these companies make some incredible, products, whenever, I go to the John Deere facility, I always. Leave with. That. Word that comes to my mind covet. Okay, they I feel, like the marketing, and the research department and some of these companies they're. So good about making people, feel like what they own is it's not very good and this, year's, model is way, better okay, now, if, you take a look at John Deere the learning, outcome, that we really want to stress here today is to, be able to find a weekly.
Chart, And I'm gonna kind of put that in the red color on the Left we're. Looking for a weekly chart setup of a bounce or a breakout, now. What, you're going to notice right here is this is really more of an intermediate. There's. Your cup on the, right-hand, side what do you see well I see a higher, basing. Area, okay. And. Now, what. We really see is if we look at this candle, the candle this. Week okay. This, would be close, above, the high of the low week. Now. So, this is kind of more like a bounce, off a horizontal. Support where, it's coming strong, into. The area, of resistance. Now. Some. Investors, don't mind to buy the stock and resistance, if they're speculating. That. That stock might break through resistance, that's. Option one option number, two they might say you know James I don't mind to buy the stock but I'm not gonna buy a full, position, understood. Now. If I take a look at this thing, so first off I'm identifying. A. Weekly. Chart. Setup, of a, bounce or a breakout something, that's in a trend now, watch it in those that the price action is, above. The green line what does that mean it, means that there's some momentum, there it means. That there's also a trend there now. You're going to notice that one of the other things we said we want to watch is. We want to look for stocks, that are outperforming, the, sector. And the. Index. Okay. Now. We. Don't want to overlook that so, down at the bottom this, is saying this is the stock in. Relationship. To the index of the SP it has. Been outperformed. For quite a quite, a long time if I. Add one. More. Relative. Strength and I would include this in the sector, so. We're just gonna type. In relative, strength there double. Click and now what. I'm going to do is I'm going to put in that sector, and I'm gonna label that as I, X. I okay. Now, if you don't know how to put that, on let. Me know and I'm gonna mark that a little, bit fatter so we can see that okay. There we go okay there we go so, we have relative, strength, this.
Is The sector. Excuse. Me the S&P, 500 the. I-x side that, is the sector, both. Of these are, outperforming, the, index, and the, sector now let's get the common, question. Out of the way does, this always mean it's going to have to form absolutely. Not okay, all right now, what. You're gonna see is in this case is we're going to show an example of, like a half of a position, I here. Now, if I go take a look at this you're gonna see that it's had a pretty, strong move to the upside, earnings. On this are not until, 5:17. So a little bit of time there now, you might be thinking well James if I buy this stock here could this stock maybe pull back a little bit and maybe. Try to retest. This. All hi I like where you're going with that and I'll, mention where that all the high isn't just a sect so. First off if our positions, are about $20,000. Typically. We're. Going to actually move this down to where it's only about 10,000. Okay. Now, first thing I'm going to do is I'm going to edit the order I'm. Going to change, where has the pool balls change. It down to the dollar amount, if each. Position, is like, $20,000. We're only doing a half of the position, that, means the budget. Amount would, be $10,000. So, we're saying look half. Position, limit. Price of 169. 19, the, limit day limit. Means that's the most we're willing to pay and if, I do that order what you're now going to see is if I go now confirm. And send now. What you're going to see is there's. The order there's the capital, there's. The Commission, now. If. I now go back and, I'm going to put this right in that stock section, so. If you this is your first time in this class we, have a portfolio, that we tracked and so, this is a stock trade I'm going to put this right in stocks JB, there. We go and I'm going to send that order, now. If. We were going to say well if the, stock were to pull back, where. Could, the stock pull, back, to so. Let's all get our technical, analysis, glasses, on okay. Well. Good. Old, resistance. Maybe. It'd be. Potential. New. Support. Well. It might be right around 165. In change, well. Maybe could the middle, of the green, candle, today could, that also be, a support, level and. You. Might be thinking James, that's exactly, what I was thinking okay well. Let's take a look at this I'm, gonna put that second order right at the middle, of, today's. Candle, maybe. Trying to catch the stock on some fluctuation. Maybe if the stock were to go down some, trying. To catch the stock in a little, bit of fluctuation, now. Just, because I buy, potentially. For less doesn't. Mean that it's going to go up once we buy it but we're just trying to buy it a little, bit closer, to. The. Support, level. So. The second, half of that position. 10,000. Now. What you're going to see is it's a limit, of. 167. 50 now. What. Not assuming, that that's gonna fill today, well. I'm gonna look at a changing, day to, GTC. Because. I don't know if that's gonna fill today I'm not thinking that's going to but, maybe on Monday maybe on Tuesday, when it fluctuates, who knows I'm. Gonna change that to GTC. And see. If it can't fill. GT, see now. What you're now going well I'm going to see now is if I go confirm and send there's. That other half. Okay. And there's. The Commission, so, there's a good and bad about kind of splitting up the position, number one is all my. Entry. Is not. Based, off one, entry. Spot, the. Bad part about that is they, are separate, commissions. Okay, so, understand, that but. You are trying to buy the stock a little, bit lower trying. To count on some fluctuation. Of the stock now. If I go back and actually take a look at this I'm. Gonna actually go back put that in stocks JB as well there's. The capital. There's, the Commission, now. When, we look at for example if, that's what we wanted to I'm gonna send that order and there. It goes now, you're, going to notice that right, on the screen we. Can see plus, 59, that's. Saying James you're trying to buy 59, shares act at. 167. 50. Came, to see the order right on the term ah, now. Lisa says D to maintain your grass tennis, courts, Lisa. You're trying to get me it so the guy I'm playing a guy today he's he's, he's, ranked, he's probably top. While he's up.
For Youth in the country or so and he's. From London, and. So. We kind of joking today that I'm gonna play at home soil today at 6:00 in. July. When I go over to London. To Wimbledon I told. Him I was gonna play on the green grass there, and so. That's kind of funny you would say that I don't. Know if they use juggler, if. Maybe. Machinery, on those courts but. Lisa I'll be happy to tell you if you're just wondering, what we're talking about I do, like tennis I like, golf I just I need to get better, all right now, what, I'm going to do is let's just take a quick gander so. When we actually look at some of these it's not just, cashew, that we talked about yesterday you. Are also seeing, a continuation. Ellis's, verify, here if I, know I want, to kind of think about I want. To kind of. I'm. Sure all of us. Let's. Say you invested, for 12 years and if. You were to go back. What. Do, you wish. You. Would have known I'd. Like you to type that in now. I have. Invested since 1996. That's when I first got started I was 18 years old and so. Some. Of the comments. That investors. Might say if I, could go back when. I got you, know if I could go back to when I got started what, do I wish I would have known I think, there might be some investors, that might have said I. Underestimated. The. Importance, of weekly, charts, okay. That. This is really the intermediate. Trend. This. Is kind of more what we would call maybe the instant, potentially, the. Institutional. View why do you say that well, because a lot of institutions might. Not, be. Predominantly. Day. Trading, or swing trading now. Are. They not trading, some short-term I said, predominant. They're not predominantly, okay, now. The other thing is I think so that's one thing so, what we see on this chart is on UMP we, really, see, that the. Second, thing that investors, might say is I wish I would have known is that when, we learn price, patterns, that, price, patterns, are not just. Daily, charts, the, first time gentleman showing me price patterns I thought man so you want me to be like a short. Term type of trader that was, the wrong perception. What. We see right here is this is really where if we ran up went to a brand new high pullback. And really. The pullback was, really a checking. Back to, the old high this, is what technicians, call stair, stepping and now. What you're going to see is a little hammer, candle, off, at, ten day moving, average, this, in this case of weekly and now, what we see is what we call close above, the high of the load day so. Now if, we take a look at this now that nothing, I can do this one as a trade but what, you're going to see in this case is it went past the earnings got. A pop on earnings the, one we'll talk about is a stock called CSX, and. So. Sometimes, when these stocks pop which both of these just went through the earnings is. Sometimes, when they pop the. Gap up price or maybe even let's, say the wicks they. Might create a higher, base. Area. Of support, and, that. Might take some time, to. Develop. Okay. At the example, I'm going to give and have. Given is a, small, company called the. Linen. And, Lulu. Let, me just give you a quick example what, this potentially. Might look like I'm not saying as CSX. Is going to do the same thing but, what you'll notice is a gaps up in price and it pulls back one, two three, four days it's. At right around one sixty four and a half ran. Back to the upside on four, or five that's a high. Pullback. Guess. Want to check back to the previous, low then. It ran back up guess what for 16, a higher. High, oh look. A higher. Level. Of support now. The one I am let's, just verify this okay we, said in our learning, outcome, we. Want to look for stock than is really. A identify. Or. Look at a weekly chart setup of a. Bounce, or, a breakout. Okay. So let's kind of go through that little checklist, well. If I take a look at this what you're going to notice is it, on, an intermediate. Trend I. Think. It is going from the lower left of the upper right if you disagree, please. Speak, up now. Second. When, I actually zoom, in on this any, of, this little consolidation. Mail area that we've been in the, price, today is getting above that area. Socket of consolidation. So far if we. Go back down to the one-year daily, chart what, you're gonna see is kind of poking, its nose almost. Hammer. Like, candle. Like. A more like candle. Above. The ten day moving average has anyone counted how many times I said that they'd a moving average it. Was at least ten times now okay, that, might be a focus, now, by the way is 10, why. 10, could you use a nine could use eleven it's, just a proxy. For. A shorter, term trend if you would like to use a nine or eleven. Or something like that. Feel. Free we're. Just using the 10 day as a shorter, term proxy, now. What. We need actually also factors, we said we're looking for stock there's outperforming, the sector, and the. Index now.
If We. Take a look at let's say the index isn't performing. Outperforming. The index well, what you're going to notice right here on this chart the red line which you can't really see it that's. The baseline that's the SP and what. We're noticing is Lulu. If, that. Line is. Drifting. Farther away from the, baseline, the, relative. Strength, is, increasing. Okay. Does. That make sense now. One. Thing we need to check down here is this is looking at industrials, ah without, time industrials, so, if we kind of thought of what, would be. Well if Lulu being. Retail. Consumer. Discretionary right, well. If I right click on this line right click and it's. Study, I'm just a right, clicked on the line now. What I'm going to do is I'm going to come back and just type in AI XY. Okay. And. Let's just verify that yeah. I XY, that's. The consumer. Discretionary. Sector. Okay. Well, let's double check now, let's just kind of see what we're we what we what we see here so. It's a stock that's outperforming. The sector, it does, not owe it and this is toppling the SP and it's. Outperforming. Currently, the sector, it does not always, mean it's going to that's, why the line, goes up and down we're just looking to see what the current trend, is okay. Now. If, we take a look at this I'm going to look to add to the position I'm. Gonna right-click on the chart, I'm gonna drop down to by custom, with. Stop. Now. There's two areas here that. We could probably look at to. Evaluate. For. Those support, areas we. Could say from a tighter stop, perspective. Well maybe that stop is maybe, 167. 75, maybe. Let's say less. 2 to 3% or. We. Could say well James I want to set maybe a looser. Support. And. That. Might be right at 1, 64-57. Less. 1 to 3% those. Might be some areas that you might look at but, if we set a stop, at 160. For, 39. We're. Gonna go down a day to. GTC. Okay, so, that way we're not updating. To stop on a daily. Basis. It. Could but. Now what you're gonna see is if I go to confirm, and send we're. Buying about a hundred, shares of Lulu which, is about, 17,000. The. Commission, $5, if the, stock were to go down to, 164. 39. Or less, that's. The keyword or less, the. Stock could be triggered, to be sold at. That price, or, below. That price if. That's what we want to do I'm gonna put that right in stocks JB. And there. It is okay, now. Let, me take a quick look at this okay, now if, I go back and I want to kind of show something. Just. Real quick so. One, of the things that I think is really important, is could you imagine if, in. The first quarter. Of, this. Year you. Decided. To, take time off and, I. Don't know let's say you just said look I always wanted woodworking. Basket-weaving. Who, knows just wanted, to kind of go out there and play golf every day and not pay attention to your investments, Wow. The, thing is we're trying to focus on we're not trying to spend 22, hours a day on investing, but, I think the important, thing is as, part of being an investor's continuing, to educate yourself plugging. Into some classes, pertaining, to your interest, level and. So one of the things if you said James I'm really interested, in. Really. Learning about investing and, maybe from the standpoint of that you talk about income, Ben. Watson really, has a class coming up on this, Monday, so Ben my good friends we teach the in-person workshops, events together sometimes, and you, see that he has a class on cover calls which obviously involves, stock ownership but. If you said James that cash secured, puts that, kind of interest me as far as being a potential buyer the shares but.
Also Trying to make money from different ways such. As time and volatility. Check. Out Ben Watson's, class at 3:00 okay. Go. About 55, or so minutes check, that out okay, and he, does a really good job presenting, it if you said James up until this point I've just been I've been mainly a stock investor if you're. Trying to diversify the, ways, you make income and maybe you say James that's, what I would want to do I want to try to make income. On top. Of riding, trends, Ben, Watson's, class could be a great look there for you now when. We actually take a look at this other stock I'm gonna bring up an example. I'm. Going to go back to a stock. X P we, saw really on, the Dow Jones down. Moving up quite aggressively, over the last couple of days we, mentioned, stocks like, McDonald's. The, golden. Arches okay. All. Right now. The. Paper money account has that they. Were it was an example, Nike. Last. Two or three days we've. Talked about the example of Nike we, these, are not recommendations, were long those stocks in the pit money but, one of them I might want actually take a look at here is bring, up a stock such as, American. Express. Now. Remember. Let's go back to their learning outcome we are focusing. On a weekly. Chart okay. Well, I want to go back to the weekly chart if we could go back to when we first invested. That, might be a major, as, far, as jeez I wish I would have known the importance, of it now. What. You're now gonna see is on. The right-hand side price. Patterns second thing we probably wish we would have known is price. Patterns, are not just for short-term traders. Now. What you're gonna see is that a little run up in price, wow that looks like a cop that. James does everything, look like a cup - you. Know. Everything, okay, but. I'm glad you're asking now the, pullback and, what. You're gonna see is this is what we call the handle, in, other words where if I took my finger and kind of put it in there right the cup in handle now, if we've got a look at this we probably have about a 92 and a half as, far as a base and then we really have probably in the ballpark, 114. Ish the idea, is to take the measurement, here correct. Me if I'm wrong and I could be hmm. I need, a calculator. 114. 9250. That's. Gonna be about 21. And a half dollar, width, so. If that stock were to break above resistance. Longer-term. Texas, Tech business we're not saying hey we think it's going to do this in a, week or two this, is probably going to take potential, time it might not ever, get, there so. That would give us a potential, price target, longer, term of really. About. 135. 50, now what. I'm going to do in this example is I'm going to come back and, I'm. Gonna buy now you're gonna see it in this case is those earnings, are they. Were this morning now. What I'm going to do is I'm going to right click on the price graph I'm, going to come down to buy custom, whist stop we're. Gonna mark on the chart here. Okay. Now you will, see that it is outperforming. This the, S&P, if we. Look at for example the. XP. And compare, that to the financial. Sector, it. Is also or has. Also, as well then. Outperforming. The sector, just kind of want to see how it plays, out and now. If we're looking at about a, stop. In I should say a support, area we. Might really mark a maybe. A 30 period moving average, maybe. A little bit lower than that we might say James maybe in the ballpark, of 109. 27. So. If I said James I'd like to set a little bit looser, stops. That. Might be so if I use the lower, line, 109. 27. Less. One. To three percent my, example, here is, 105. 99. That's taking the lower support, area less. Three. Percent now. In this case I'm gonna change the way it's a stop, David, GTC, so, this is saying if the stock goes to that price or less sell. The stock okay. That price or less if. This is what we want to do repeat, the stop is at the lowest, below, the lower support area the, stop is at 105. 99. Now. James could we set a target, on this yes. Okay. You, don't have to but, we might have an idea of might maybe, where that stock potentially. Could go to we, have that really, here's. The capital, here's. The Commission, if. This is what we want to do we're, gonna send, that order now the learning, outcome, of what we really want to do here today is to, really, make sure that, impressed.
Upon Our mind is the, importance, of weekly charts in, other words seeing, a dominant. Trend if you cannot see, it in 10, seconds, it's probably not that dominant, the, second thing is to really be seeing shorter, term breakouts. Shorter. Term bounces, or, breakouts. And then. On the daily chart looking to see if there's any entry. Setups, okay. Also. Keep in mind that we probably could see potential, price patterns, on those. Weekly charts as well and also, that step above, what I wanted you to do for a takeaway is. To really. Make sure, that. You also look, and see how your how those stocks are performing. Compared. To the index. Compared. To the sector, are they, potentially outperforming. Okay, double-check, that so, that's what I'd like you to do for homework I'd like you to pick two stocks that. You actually see an intermediate, trend on on the weekly chart second. I like you actually to verify, is it, outperforming, that the index is it. Outperforming, the sector, do. Your, due diligence on, those stocks and practicing. Your paper money account now, I'm out of my time here today, but. Remember I also did send to you in the chat I did. Send to you a. Survey. A quick, five, questions. On today's. Class, did. You enjoy it did, you think I was kind of funny but, and you're now willing to admit admit it and I just messed with you a little bit I like to have a little fun as you can tell now, remember, that in order to demonstrate the function out of the platform as you saw we, did use actual, symbols remember, the TD Ameritrade, does not make any recommendation, to terminate any security, or strategy that is up to you to decide what, and if you want to invest so. Again I thank you so much your comments, your questions in your participation, coming. Us up right. After me will be Barbara Armstrong, really, with, getting, started with TD. Ameritrade calm and thank. You so much for all your comments your questions and your participation, thank, you so much take care bye-bye.
2019-04-25 15:57
