9/23 Best Idea Idea For The Week Ahead

Before this weeks best idea let’s talk about last week’s best idea BRK.B, with the ugly week in markets its important to discuss it. I said last week that on a weekly close below 362.10 I would close the trade and move on. It closed yesterday at 360.16. That doesn’t mean Berkshire isn’t a good long term bet for those who are making that, it just means short term, the sellers are in control and the computer that run the market are likely to turn on it, key word “likely”.

Let’s talk about why, for starters it broke below the breakout level, see that huge breakout it had the week before OVER the 2022 highs, well due to the overall market that became a false breakout and it reversed and closed lower this week.

If you zoom in closely it formed a bearish engulfing candle as well meaning it tested higher levels and was rejected all the way down by sellers. On the plus side, it did hold that 8 ema weekly, the blue line, so it hasn’t fully broken down yet.

The monthly candle closes this week and right now, if it closed today, it would be a gravestone reversal candle. Now all these names may be silly to you but they’re all telling you exactly what’s happening within. Look at the candle below, how does that form? A name opens at a level, it tests much higher levels for a whole month and then it closes back at the lows where it opened. That is telling you market participants aren’t interested in higher levels, hence the stock is dead, that’s why its called a gravestone candle.

Again this doesn’t mean anything regarding Berkshire long term, it just means short term, there is a higher probability that it will not perform well. If your targets are further out, I’m sure Berkshire will be fine, it has been for many decades, no reason to believe there is anything wrong with it, but it is up alot since October lows and seems set for a period where it cools off.

Look at OXY one of his top positions, everyone is saying oil is the play, and yesterday JPM said oil is going to $150, well OXY still can’t close over that $66.xx level and it too just put in a really nasty candle showing it was sold all week and closed near lows.

Best Idea For The Week Ahead

It was hard to find a name that had a green candle this week, there very few, I managed to find a name that did while also having 2 big call buys this week to go along with a 9% dividend. If you guess Altria or BTI, you were wrong.