I’m a big sports fan. Almost as much as I like to trade, I like to watch sports.
And the big overlap between the two, aside from the competitiveness of it all, is the concept of looking one step ahead.
You always have to have your eye on the next big move.
It’s a difficult process that keeps most athletes and traders away from doing it a long time – they can’t look ahead.
The pandemic was a great example for investors.
It was easy to make money after the initial crash. Everyone was taking their stimulus funds, buying stocks and everything you touched was surging higher. That went on for over a year.
So, who wouldn’t blame you for thinking you had the magic touch when it came to investing, only to get it all taken away, and then some, when the bear market of 2022 hit.
Instead, we have to keep our head down and put in the work to stay ready for that next big move in the market.
And I think that next big move is lower.
I have three stocks I want to share with you today that all ended up on my Tank It list. Here they are and why I see them falling…
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General Electric (GE)
Back in the day, General Electric was the poster child for the industrial sector.
It’s a far cry from its original industry leading company, but shares have caught a bit of a second wind here in 2023.bThe stock has managed to pull off an impressive rally, up over 100% in the past year.
After this impressive rally, GE may be off my eternal Tank It list.
Only time will tell.
But, the next big move for the stock to me, is going to be a pullback. It has the potential to easily fall double-digits in the months ahead.
And there’s no need to jump the gun.
We’ll use that tight price channel as our signal for when to turn bearish. When it falls below that key support, it’s time to buy put options.
Ford Motor Company (F)
Ford is another stock making a nice run.
This one is tied to a clear technical pattern, shown below, where the stock broke out and went on a nice run. But that run has came to an end I believe, and the stock is set for a quick reversal in the weeks ahead.
The red resistance and green support created a clear descending triangle pattern.
Once the breakout occurred did exactly what you would expect, surging higher to cover the height of the pattern.
Now, it’s a new ball game for the stock.
It could consolidate sideways, continue to climb, or, and as I suspect, start to tumble lower.
F is on my Tank It list for that reason. I have my line in the sand, and if the stock starts to roll, my readers of Flash Alerts will be alerted.
Workday Inc. (WDAY)
Workday is a leading cloud application company that investors have been pouring into.
Shares have mounted a nice rally, following the overall trend of the broader stock market.
But I still think we have a way to play the next big move.
It stays with my bearish take on the previous two companies.
Look, I’d love for this stock, and the others mentioned today, to simply keep running higher.
They could, don’t get me wrong.
But the odds are not in favor of that happening.
Instead, that green support level, from the previous peak, is going to signal a bearish move.
That’s what I’ll be watching for a time to add put options in my Flash Alerts service.
That’s all for today.
I hope you all had a great 4th of July last week (my favorite day of the year).
Without Independence Day, this great country of ours simply wouldn’t be where it is today.
That I can promise you.
Regards,
Chad Shoop, CMT
Editor, Bank It or Tank It ELITE