Fast Money Recap & Review
The following recap of CNBC's Fast Money is for Friday April 6, 2007. Happy Easter and enjoy guys and girls.
Top 3 - Trading News, Trading Earnings and Trading Oil's Impact
The day's headlines make you sort through a ton of information and this segment was about sifting through that news to make money. When news breaks you need to ask is the news priced into the and is there still money to be made? Adami looks at the way a stock he owns has performed leading up to the news. He says to look at the P/E compared to the company's competitors and look at the trading volume activity. Large trading volume leading up to an event usually means that people knew the news was coming and the news may be priced into that stock. Microsoft Corporation (MSFT) was the example given, it had a huge run up in anticipation of the Vista release. The Vista news was priced into the stock and this was great opportunity to sell the news. Macke told us that if the news is coming from the mainstream media, you will not have an edge against the smart money. He feels it is important to know when not to trade and at times the best trade you will have is one that you do not make. Strazzini thinks it is all about precedents. News will come out, then he checks to see if other stocks have acted the same. He asks if the event or announcement is relevant to the main business of the company. Bolling sees money to be made even if you are a little late if there is enough money chasing after a good story. When there are blowout misses the crew asked how to trade these announcements. Earnings comes four times a year. Earnings are news events so all the above apply, but there are also unique ways to tell how to trade around earnings. Strazzini says you want to see who releases early in earnings season and how it impacts the stock. The early reports will give out clues for later reports, specialty retailers especially. Context is not always everything, drug companies usually do not follow the others. Brokers tend to swim in line though, when one posts good numbers, chances are the others will also report positive business. With the energy market, earnings usually tend not to matter and in refiners, investors tend to know how much money the company is making, thus earnings are not as important. The last segment was about trading oil's impact from $30 to $100. We all know the price of oil affects everyone, warm winters can send heating oil prices tumbling, Turmoil in the Middle East can send crude soaring higher. Bolling thinks a major geopolitical event would be the cause of oil going to $100 or higher. Gas prices would move well above $4 and this is a chance to get into Chevron Corp. (CVX) and other refiners, as well as gold.
HOW TO TRADE THE NEWS VIDEO
HOW TO TRADE EARNINGS VIDEO
HOW TO TRADE OIL'S IMPACT VIDEO
SECTOR TRADE-Trading the Industry Fundamentals
Each sector is governed by its own rules of trading. Each sector was broken down. Trading Retail Stocks - Macke told us to start with same store sales, as they give a good indication of how retailers are doing in their stores that have been opened for over a year. Also keep an eye on the number of stores with saturation being a problem. The Gap Inc (GPS) was the example of a retailer that just ran out of places to grow. Trading Tech Stocks - Strazzini said to look at the profitability side of an earnings release. The average selling price (ASP) as this moves the company's product line. A new product line will cause a dramatic drop in the ASP a year later, cell phones are a good example of this. If inventory is up, the price will be down. These are the definition of cyclical stocks and market share is another variable metric when it comes to tech. Trading Commodity Stocks - Energy fundamentals apply here but with commodities you need to be aware of geopolitics and weather. One weather will be great for one commodity, but horrible for another. Trading Industrial Stocks - This is about understanding the supply chain according to Adami. The example is airlines being profitable meaning good news for a company like The Boeing Company (BA), but with a deeper look you will see companies like Rockwell Collins Inc (COL) due to the parts that need to be made for parts. Trading Financial Stocks - The financial sector has many sub-divisions that don't always abide buy the same rules. For the banks you must know important metric is the net interest margins and with insurance you need to know an insurance company's premium loss ratio.
WATCH THE VIDEO HERE
Grade The Trade
WATCH THE VIDEO HERE-too much to type guys
Chartology -Chart Terms Defined
Island Reversal/Island Bottom - This is a term for a stock chart that has a big gap down, then trading activity, then a gap back up. An exhaustion in selling is usually the cause. Bears are trying to sell and bulls are trying just as hard to take in stock. The name originates from the idea that one could draw an island between the gaps on the chart. Double Top - An exact double top rarely occurs, and it usually will cause another attempt at a rally for the stock. This happens when a stock goes to a certain price, falls, then tries to rally back to that original high price. Oversold - When a chart signs of oversold, there are too many sellers. When the selling pressure dries up the buyers come back in to buy up the stock.
WATCH THE VIDEO HERE
FACE2FACE
WATCH THE VIDEO HERE
Final Trade
Today the guys gave us rules never to break, and ones that are the hardest to follow. Macke told us that it is the hardest thing to do but sometimes it is important to just cut your losses and admit you're wrong. Strazzini said that he never buys intraday puts and calls on breaking news, you will be too late and lose. Adami told us never to trade angry or out of boredom. Bolling agreed with Macke, but it is important admit you are wrong. Bolling also said never to buy an ethanol stock.
WATCH THE VIDEO HERE
Top 3 - Trading News, Trading Earnings and Trading Oil's Impact
The day's headlines make you sort through a ton of information and this segment was about sifting through that news to make money. When news breaks you need to ask is the news priced into the and is there still money to be made? Adami looks at the way a stock he owns has performed leading up to the news. He says to look at the P/E compared to the company's competitors and look at the trading volume activity. Large trading volume leading up to an event usually means that people knew the news was coming and the news may be priced into that stock. Microsoft Corporation (MSFT) was the example given, it had a huge run up in anticipation of the Vista release. The Vista news was priced into the stock and this was great opportunity to sell the news. Macke told us that if the news is coming from the mainstream media, you will not have an edge against the smart money. He feels it is important to know when not to trade and at times the best trade you will have is one that you do not make. Strazzini thinks it is all about precedents. News will come out, then he checks to see if other stocks have acted the same. He asks if the event or announcement is relevant to the main business of the company. Bolling sees money to be made even if you are a little late if there is enough money chasing after a good story. When there are blowout misses the crew asked how to trade these announcements. Earnings comes four times a year. Earnings are news events so all the above apply, but there are also unique ways to tell how to trade around earnings. Strazzini says you want to see who releases early in earnings season and how it impacts the stock. The early reports will give out clues for later reports, specialty retailers especially. Context is not always everything, drug companies usually do not follow the others. Brokers tend to swim in line though, when one posts good numbers, chances are the others will also report positive business. With the energy market, earnings usually tend not to matter and in refiners, investors tend to know how much money the company is making, thus earnings are not as important. The last segment was about trading oil's impact from $30 to $100. We all know the price of oil affects everyone, warm winters can send heating oil prices tumbling, Turmoil in the Middle East can send crude soaring higher. Bolling thinks a major geopolitical event would be the cause of oil going to $100 or higher. Gas prices would move well above $4 and this is a chance to get into Chevron Corp. (CVX) and other refiners, as well as gold.
HOW TO TRADE THE NEWS VIDEO
HOW TO TRADE EARNINGS VIDEO
HOW TO TRADE OIL'S IMPACT VIDEO
SECTOR TRADE-Trading the Industry Fundamentals
Each sector is governed by its own rules of trading. Each sector was broken down. Trading Retail Stocks - Macke told us to start with same store sales, as they give a good indication of how retailers are doing in their stores that have been opened for over a year. Also keep an eye on the number of stores with saturation being a problem. The Gap Inc (GPS) was the example of a retailer that just ran out of places to grow. Trading Tech Stocks - Strazzini said to look at the profitability side of an earnings release. The average selling price (ASP) as this moves the company's product line. A new product line will cause a dramatic drop in the ASP a year later, cell phones are a good example of this. If inventory is up, the price will be down. These are the definition of cyclical stocks and market share is another variable metric when it comes to tech. Trading Commodity Stocks - Energy fundamentals apply here but with commodities you need to be aware of geopolitics and weather. One weather will be great for one commodity, but horrible for another. Trading Industrial Stocks - This is about understanding the supply chain according to Adami. The example is airlines being profitable meaning good news for a company like The Boeing Company (BA), but with a deeper look you will see companies like Rockwell Collins Inc (COL) due to the parts that need to be made for parts. Trading Financial Stocks - The financial sector has many sub-divisions that don't always abide buy the same rules. For the banks you must know important metric is the net interest margins and with insurance you need to know an insurance company's premium loss ratio.
WATCH THE VIDEO HERE
Grade The Trade
WATCH THE VIDEO HERE-too much to type guys
Chartology -Chart Terms Defined
Island Reversal/Island Bottom - This is a term for a stock chart that has a big gap down, then trading activity, then a gap back up. An exhaustion in selling is usually the cause. Bears are trying to sell and bulls are trying just as hard to take in stock. The name originates from the idea that one could draw an island between the gaps on the chart. Double Top - An exact double top rarely occurs, and it usually will cause another attempt at a rally for the stock. This happens when a stock goes to a certain price, falls, then tries to rally back to that original high price. Oversold - When a chart signs of oversold, there are too many sellers. When the selling pressure dries up the buyers come back in to buy up the stock.
WATCH THE VIDEO HERE
FACE2FACE
WATCH THE VIDEO HERE
Final Trade
Today the guys gave us rules never to break, and ones that are the hardest to follow. Macke told us that it is the hardest thing to do but sometimes it is important to just cut your losses and admit you're wrong. Strazzini said that he never buys intraday puts and calls on breaking news, you will be too late and lose. Adami told us never to trade angry or out of boredom. Bolling agreed with Macke, but it is important admit you are wrong. Bolling also said never to buy an ethanol stock.
WATCH THE VIDEO HERE
Labels: Fast Money Recap