We get to take a breather from the high level stuff today.
It’s fun to talk doom and gloom or about why we are on the cusp of a new bull market, which is not my take at the moment.
But, remember, price action determines your trades. Not the big picture fundamental stuff.
There’s a simple reason why…
You could be 100% right about the big picture, that this is the start of a new bull market, or that we are set to crash 50% in the coming months.
Price can still buck that trend in the short-term, causing sharp losses, causing you to question your positions, and ultimately, shake you out of your trades.
The answer is simple – follow price action.
If you are right about the big picture, those trades are going to come.
And by following price, you’ll know exactly where to look.
Today’s Bank It or Tank It covers five hot-button stocks with all sorts of different chart patterns.
I think the bottom could fall out of the market soon, but tracking these trends on individual companies are what will be the tipping point for me.
Let’s dive in…
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Disney (DIS)
First up, everyone’s favorite amusement park, Disney (DIS).
Between the tv channel, movies, retail stores and amusement parks, they have a lot going for them.
But the company has struggled since the pandemic to continue the success of the past.
They may find it again, but investors are not sure if that is going to be anytime soon. To know that, look no further than the price chart.
Shares haven’t done much over the past year, forming a descending triangle pattern with a horizontal support in green, and declining resistance in red.
As it bounces back and forth, a breakout is looming.
Based on the length of the triangle pattern, it’s a significant pattern to watch.
Whether shares breakout higher or lower from here will dictate the price trend for the next twelve months.
We’ll watch these two levels closely and when it gives us a breakout, we’ll jump in to follow that trend from there. No need to guess before then.
Simply based on the weakness over the past two years, Disney is going to land on my TANK IT list for now.
Coinbase (COIN)
Next up, we’ll look at Coinbase (COIN), the crypto trading platform.
Coinbase has came back to reality over the past year, with the stock struggling to gain ground.
This stock is trading in a falling price channel, which is very bearish.
It doesn’t give us those converging trend lines like Disney’s stock had. Instead, it could slide lower for months, maybe even another year, in this price channel.
That’s not likely, so we will still use those levels as trade alert for my Flash Alerts readers, as a breakout likely signals a further move in the same direction.
But for now, the price action is weak for Coinbase. As a result, COIN is on my TANK IT list as shares drift lower.
AMC Entertainment Holdings (AMC)
AMC, one of the leading meme-stocks from 2020/2021, is back to where it all began.
Shares are trading for less than $5 per share. For a stock that topped $70 a couple years ago, this is a major trend reversal.
And I think it is an opportunity.
Now that shares are back to a normalized level, the stock can find a bottom and begin to move higher.
Shares are in a wedge pattern in 2023, which gives us clear buy signals going forward.
This is a stock that is a must watch. It’s one fo the real companies out of the meme-stock craze and operates one of America’s favorite past times – movie theaters.
Shares can go lower, but as long as the company can stay in business, this stock is likely at a higher point in 12 months.
Let’s put AMC on my BANK IT list today as we look for a bottom in 2023.
Gamestop (GME)
Now, this one has a different trend, but was the first born of the meme-stock craze – Gamestop (GME).
Shares have been beaten down as well, but instead of falling back to 2019 levels, it is at 2021 and 2022 levels that are part of the short-squeeze bubble.
The big warning sign here, and based on AMC’s price action, is GME has a lot further to fall.
This stock hasn’t collapsed like so many others in the meme trades but it is going to suffer the same fate.
Within the next two years, GME will likely be sub-$1 per share, barely hanging on.
Don’t chase it here and go all out bearish with the stock below the green support.
No surprise here, but GME is on my TANK IT list.
NVIDIA (NVDA)
So far, these stocks are pretty bearish. And the only one that was a Bank It stock, was bottom fishing.
I wanted to end on a positive note and NVIDIA (NVDA) does just that.
This stock not only is trending higher, it is trading at all-time highs coming off a massive gap higher.
Take a look:
NVIDIA isn’t playing games.
This is a serious, and possibly extremely bullish move.
You do not want to bet against this stock until it is below that green support level. Then, things can change quickly as it could close that gap and head lower.
For now though, that gap is a massive support level as the AI tech stock looks to leave the rest of the market in the dust.
NVIDIA is on my BANK IT list and I’m not sure what it will take to make me chase it here, but this is a bullish price chart that bucks the trend of the broader stock market.
If you want alerts based on the trends and patterns I highlight in my Bank It or Tank It issues, just sign up for my Flash Alerts system. It’s super cheap, lasts a full year and gives you trade alerts whenever a new trend is established.
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That’s all for today.
Have a great weekend.
Regards,
Chad Shoop, CMT
Editor, Bank It or Tank It ELITE