Tip:
Highlight text to annotate it
X
I'm Dan Fitzpatrick at StockMarketMentor.com on Friday, March 8th.
Here's our free chart
for the weekend.
I want to look at SolarWinds ( $SWI SolarWinds Inc ). Now this is a IBD 50 stock, and by the way
members, I'm covering actually several of the IBD 50's in the
regular Weekend Update for members because I've got some that I
think are at really good buy points,
and they're not the stuff that you get in the paper. Anyway, we'll take a look at
that. I want to go to SolarWinds ( $SWI SolarWinds Inc ) here.
You might look at this and say, "Well, I don't want to buy this stock because it's up at
this last high and so I'm going to move on, go elsewhere.
I wouldn't do that and here's why;
if you look at the weekly chart,
I don't look at this as a trading stock, traders
gravitate to certain stocks for certain reasons
other than just high beta;
I don't know what it is, but this, to me, looks like it's poised to break
out even higher than it is right now. Again, look at the weekly chart, it's
been in this long consolidation for the last couple quarters
and if you look at
the 40 week or the 200-day moving average
it's just about flat,
stocks been coming down like this, so we're just getting a break out to the up
side
and I would just want to go ahead and start building a position now, if you
don't already. It's actually kind of fairly valued; some would say it's
still cheap. It's growing at 40 percent per year, that's revenue growth.
PE
is like forty-three and that's over three times the S&P, but most of
the stocks in the S&P
aren't growing at 40 percent either.
By the way SolarWinds ( $SWI SolarWinds Inc ) is not in the S&P.
So what I'm suggesting here is, go ahead and take a little bit of stock now,
if the stock does pull back, and it kind of looks like it's poised to, but the
problem is, so do a lot of stocks, and so have a lot of stocks
looked like they were going to pull back
and they just never really did give you much of a chance. So what I'd suggest
is taking a little bit of stock now. If SolarWinds ( $SWI SolarWinds Inc ) does come down a
couple of bucks
that's probably about all you're going to get. I want to be investing off of this
timeframe, invest off of the weekly chart.
You can see we've got plenty of room to the upside, like a lot of room to the
upside after this sideways consolidation,
but take your positions off of the daily chart; it's called zoom out for the
decision,
zoom in for the action,
as soon as you take action; Bam!
Out here.
One of the most
common mistakes that traders make is looking at this and saying, "Okay, yeah I
like this, I see it's not a momentum some stock right now
but it sure looks like it's about ready to go."
Then you zoom in, you look at the daily chart, maybe even go down to
the15 minute chart, which is fine,
and you buy the stock here and then you go, "Okay, great!" Zoom back out,
never get past the daily chart, stock flops around here, for a week or so,
you get impatient, you sell the stock at $58.35
or $60.05,
whatever, and then you move on.
Meanwhile, there's nothing that's changed in the weekly chart,
time marches on,
and so does this stock,
without you.
So I don't want you to do that. Zoom in for the action that you take
on the decision that you make
based on the weekly chart as well as some fundamentals. PE and growth rate,
that'll get you about
80 percent there on the fundamentals,
the rest is really sector performance. So anyway, members get over to the
Weekend Update, ready to go.