Hello and welcome to Trading Growth and Value Stocks, and there is the bell. You heard from the Fed a little, well, probably about 90 minutes ago. They announced that actually the Fed was gonna keep the rates at 4.25 to 4.5%, so no change there. We'll talk about kind of some of the commentary he gave right after on the other side of the disclosures. We'd like to welcome all of you here today as we talk about trading growth and value. It does not say buy and hold, okay? So we're really trying to find some stocks that could be growth-oriented, value-oriented, income-based, it could be like a turnaround story fundamentally and technically. We're really trying to make sure that with what we're practicing and buying, that there actually is an underlying business and the technicals are actually showing proof of that.
Now, just real quick, if you're just joining us, my name is James Boyd, I normally teach at this time. This is not a one-off class and it is not only live, but it is being recorded as well. Now, I'll give you the link for our session that you can bookmark and that way you can always have that right at your fingertips. Got Connie Hill in the chat, we welcome her as well. And as we get started, remember the information here is provided for general informational purposes only; should not be considered an individualized recommendation. Schwab does not recommend the use of technical analysis as a sole means of research. It's one way to kind of look at things technically. When we talk about examples, we will use the technical analysis as a sole means of research.
The Paper Money software application. Also remember that investing in stocks involves risk, including loss of principle. And also remember when we show examples here today, understand that these examples are going to be more stock-based. If you want to learn more about kind of a different type of strategy or derivatives, join me in the other sessions. Connie talks about ETFs on Monday afternoon. Kevin and I talk about ETFs on Friday morning. But this class is stock-based. We're going to stay. We're going to stay in our lane. Now, as we talk about kind of our agenda here, we'll talk about the market reaction to what the Fed announced. Okay. Two, we're going to talk about current positions. We have five examples that I quickly want to look at that I think we need to be kind of watching.
And I want to talk about the management of those positions. Okay. This is not just put trades on and forget them. We need to also monitor what is currently in the portfolio. And then we'll talk about some new positions. And I really want to kind of talk about some turnaround stories. Okay. So first off, just real quick, if I were to look at, let's say, the S&P briefly, and I took a look at the S&P and said, okay, where did the Dow end up? Answer, the Dow was literally down three-tenths of 1%. Not a really big move. I mean, it kind of barely moved. Okay. Now, the one thing we would have to say on the Dow Jones, you know, we kind of are in an area of resistance.
Can it go higher? Or maybe is this where some people try to target out of positions and sell? We'll come to sectors in just a moment. There are some sectors that are starting to slip. We'll together identify, how do we see that? Okay. So when you look at the Dow, still the strongest so far, you look at, let's say, the NASDAQ, which has been the weak brother here this week. We actually see that it fell all the way back down to where we were before. Okay. The diagonal trend line. And if we look at this on the right-hand side, can anyone help? Now, I'm not very good with this candlestick stuff. Can anyone tell me what that is right there? Now, could this be a bullish or a bearish pattern?
The first candle would be two words. And you could buy a vowel. Okay. And you can have a lifeline. Yeah. Some people might look at that as a hanging man. If you think that moving average is going to be resistance, or you might say, hey, James, that's a hammer time. Okay. Now, if you actually think, for example, the market, so number one is the trend line did not break. We're still holding the diagonal horizontal support. You actually might think that might be a victory that we sold off intraday, and then we rallied back and closed up, not the high, but we closed up near the high. So the NASDAQ kind of doing a little damage control here. Okay. Now, Wiley actually says, well, Ocean Life says hammer. Wiley says, you can't go higher.
Okay. Jay Richardson hammer. So a lot of you in the hammer camp Russell. Now, when they talked about the inflation being sticky, which you guys and gals know this, you know, if you go out there and buy stuff, stuff ain't cheaper. Okay. For the most part, what is cheaper? Okay. It's pretty much stayed elevated for a long time. And we, as consumers know that. Okay. Now, if you look at this, the Russell, which is very dependent upon what those interest rates are, which they might kind of get the brunt of what the interest rate is just barely holding on and still underperforming. That's not going to be an area that we look at the S&P 500.
If you look at the S&P 500 holding the middle of this channel, and again, doing some damage control, not hammer, like the NASDAQ, not as much didn't close closer to the high, but did okay traded inside for the most part yesterday's body. So, so far, if you take a look at this, we could still be making a flag right there on the S&P 500. Now, now does anybody know with kind of what the Fed announced? Okay. And let me give you a little hint here. Let me have a little fun with you. Okay. I can have a little fun. Can I, well, so first off, if we go to, you know, Connie and I, we post on X and from time to time, there's some funny things out there.
Okay. And so I kind of said, 'Hey, uh, if Mr. T kept those gold chains, he might be a millionaire, given the price of gold at over $2,800 an ounce.' All right. Now, if you looked at the gold price, yeah, that was a continuation pattern. Keep an eye on gold; I won't pull up the symbol. It's got to stay in its own lanes. Okay. But overall, gold's still pretty strong. It's not the gold companies; it's the gold price itself. Okay. So keep an eye there. Now, I want to go over to kind of something that might be a little concerning. Let's kind of say this is the negative part. Okay. So if we were to, let's say, look at the sectors, we kept saying, last week, the communication sector, does anybody remember me saying that communication sector?
Okay. Well, if you look at the communication sector, what you're going to notice is that led the last week. Now, every, I guess, Hey, sometimes maybe you're a little lucky, right? Uh, you had a one in 10 chance to pick the one. Well, if you take a look at communication sector dollars on IX, IXC. Now, what are the stocks in the communication sector? We've been talking about it, right? You have Netflix. Yeah. Yes. You have Meta. Yes. You have Google. Yes. Those are the top three. Does anybody know one other one that's in there as well? I'm going to give you a hint. It starts with a T M S. And if you bought a vowel and you say, give me a U, that is correct. And so T-Mobile dollars on T-Moose.
Got a little pumpier than that is in communications community. Uh, T-Moose was up 15%, $16 maybe. Maybe you were looking, but that's in the communication sector as well. Okay. So we'll look at that in just a moment. So if we look at, let's say the areas that are still pretty strong, you got healthcare, which we talked about. Okay. Staples, uh, financials. Now, James, you said you're going to be a little negative here. Where's the negative? Well, one of the concerns we have a little bit is when you look at this column, the 10/ 20 X. And there's a couple red boxes here. Well, what does that red mean? Now? I cannot tell you the number of people that said, well, I'm not really good at selling.
Well, this is a way to start seeing it, right? So, number one is if we start to see, let's say a moving average crossover where the short-term moving average is crossing the 20-period moving average, we get a red box. Now remember, scripts are not guaranteed for accuracy, uh, but can be helpful. Okay. So, we see a crop. Negative crossover. That's why the box is red and you're going to see, uh, that happened in financials. It happened also in discretionaries. It happened also in the S&P 500. It happened also in the, uh, technology. Is that correct? Yeah. Yes. And then if you also look at that, it happened in industrials. So what does that mean? Well, there's probably going to be some examples here today of selling or considering in selling that one stock that we need to talk about.
So when we talk about selling, we look at kind of a one, two, three method. Okay. And you'll see what that is in just a sec, but we kind of have some warning signs. The other warning signs we actually have on this is number one is a second sign, is when you look at the shorter term moving averages, the 10 period moving average, it's gone. Uh, the moving averages, when you look at the sectors, there's four sectors that really have a green moving average. And the other ones are red. The numbers in the box, they're counting the days in which the moving average has been read. So if we look to this, we would say, geez, there's probably like one third of the sector is still green and two thirds of them are down.
So we cannot say that everything is bullish. We can't say that. Okay. Now, what I want to do just real quick is I want, speaking of that, let's kind of take this and use an example here. Okay. So let's dovetail this now, one of the stocks, okay, now here's the thing. Okay. I could talk about stocks or anything, you name it, but it doesn't matter. It really comes down to show me the portfolio and let's talk about where the entries could be and where the exits could be; example, given we're going to bring up, yeah, we're in the IRA account check, and you're going to see that we're in that stock section. All right. Now, what you're now going to see is there's a stock in here that has us a live member.
We got, remember I kind of talked about looking at, let's say this. Let's say the whole moving average, and if you have like a red background, that's not typically bullish. Okay. Now notice right here, when you take a look at this Sherman Williams, that moving average, the 10 period moving average has been red for a day verify. Okay. If you look at the Google, it's been red for three days. And if you look at CAH, it's been red for two days. So do we want to wait until. Okay. Well, it says 15. Well, the longer you wait, the more likely it is or has that it's gone down. Well, that wouldn't be very fun because that means you actually risk a lot more capital.
You could have actually given all the unrealized profits back and you're now thinking, 'Well, now what do I do?' So we're trying to catch the turns earlier. Now, the other thing that we actually kind of have that can help us as far as where the stock is in relationship to the moving averages and resistance. When? Whenever we get something where it's in trend. Number four, that's where some investors might say, 'I'm going to sell.' Have you ever heard of that little saying? This is buy low, sell high. Well, trend number four is high. Okay. So when that trick, when we see a trend four, okay. That really means that the price is above both moving averages and we could be up near an area of resistance.
So when I look at CAH, I'm already feeling a little. I'm comfortable. Okay. I know I'm in trouble. I'm, I'm up against an area of resistance and I'm starting now to get, not having looked at the chart yet. Okay. And I know I'm in a little trouble because that moving average went red. Now, do you think you could do this? All right. And some of you might be, well, how, how do you get this? Let me just make sure we're all on the same page because it would hurt my feelings if we were not. Now, if I went back to my ex page, just kind of write the very tippy top. Let me kind of show you where that will show you where that is.
And what you're now going to notice is if I go back to write the very top, you're now going to see that if you said, well, how could I see the trend? Okay. If you said, I would like to get the trend on my chart as well. Well, my market watch, well, that's the script right there. Okay. Now, if you said, well, no, I want to get the trend on that chart. Notice the chart is in red. If you want a script. For the chart. It's in red. Okay. So if you said, well, I want the cold. On the chart. Well, anything with that red color, red color, these are scripts for that. Guess what? The chart. So the whole moving average on the chart, on the chart, all red.
Those are all scripts for the chart. What, well, what are the other ones? These are scripts. What's this one? Well, that's for the market watch. Okay. Now, by the way, anything that's used on the market watch could be also used as well. Right on the monitor tab. So if I said, well, how did you get that? How did you get those other ones real quick? And I'll send those to you, but just feel free to also look at that. If you said, hey, where did you get that? The 10 day whole label counter. Okay. Right there. How could I also get that whole moving average counter? The moving average crossover. Okay. Right on the market watch. Right there. So feel free to grab that. Okay. Now I'm a giving person.
So I want to share those. Okay. Had to take that back one time because I felt like people weren't really appreciating it, but I think there's been a pretty good turnaround. Now, let me go back to this. If you said, James, could I grab that and just kind of put that, let me just send this to you. Okay. Let me go back to this. If you said, could you just share that with me? Like right now, I might not have an X account to grab that. Let me get that to you. And what I'm going to do is I'm going to put this right in the chat. And I remember when I do this scripts are not guaranteed for accuracy. Okay. Our timing verify. Okay.
Now what you're now going to notice is that script that I sent out, that's the 10 whole counter. Number two, this 20, 28, 28 C for the whole counter. Let me send that one out. And then what we're going to do is we're going to use that. Okay. Now what you're now going to notice. Notice is that's for the 10 whole counter and the 20 whole counter. When I go to the monitor tab, we can look at our positions in one of two ways. Okay. When we go to the monitor tab, we're going to monitor our orders in our positions. And you actually go to the, actually this right here and go to old layout. Well, see, if I go to old layout, it's not going to show me any of that.
So there's a new layout where you can customize really the categorization of your trades based on strategy or anything. Okay. New layout. And when you do the new layout, you're going to see that there's, we could put folders in there of different types of trades. And there's a little gear. Now we know when there's a gear, you can customize the headings. That's all we did there. All right. Now I want to look at that first position right there, the CAH. Okay. And I need you to tell me what to consider with this position. CAH. Okay. Now. On this chart, tell me what you see. I'm going to really zoom in hard. Does anybody see any sell signal yet? Anything? Does anybody see any sell signal yet? Now don't be shy on me.
Okay. Because when it really comes to selling is it's your capital. Okay. So if you don't defend your capital, probably nobody else is going to. Okay. Now, does anybody see anything now that might be showing a potential sell signal? Now, remember, we count to three. Right? So if we get the short-term moving average read, this is the first strike. If someone's going to sell, they had that yesterday. Two days ago, I should say. The 27th. Do you see it? Just give me a yes or no. Do you see it? Now again, if I had a dollar for every time someone said I'm not good at selling. I don't believe they're not good at selling. They're not good at acknowledging what they're seeing. So I need you to acknowledge.
So if we said, hey, we're going to sell on the 10-period moving average going red, it was on the 27th. What would we want to see as kind of further escalation of selling pressure? Well, 20-period moving average going red, or the moving average cross. All right, so if someone says, give me more confirmation, I'll take either or, we now see that we have a crossover. So if someone says, I want to see more confirmation, number two, that was the 28th. So it started here, and then it went further. And then if we went to the very next day, that if someone says, I only sell when all three things have happened, the 10-period moving average went red, it did. The crossover happened, it did. And the 20-period moving average goes red, it has not.
So the person that would probably be selling or considering him selling would be someone who says, I really sell on number two. That has already happened. If we're going to choose that, which we're going to, we're going to go into the Monitor tab. And what we're going to do is on the Monitor tab, go into this position right here. We're going to go into Cardinal Health, and we're going to right-click and Create in Closed Order. Now, I want to be 100% clear. So the paper money account is really trying to ride little pockets where the moving averages are green, green, green, green, and green, and green, and green. So it's trying to put capital to work when there is an uptrend. And when that trend starts to fade, which we can see, it's trying to get the capital back.
And we're trying to actually go look and see other positions that might be more strong. Now, does that mean that we're never going to come back to Cardinal Health? That doesn't mean that at all. But we're going to go back to the Monitor tab. We're going to right-click. Click on Cardinal Health, Create Closing Order, and click Sell. I'm telling you right now, for some people to make a decision, it's hard. So let's all gather around. Let's all say a little thing together, such as, 'I like to make decisions.' I make decisions. And I think that's so much what it's really about is, do you like to make decisions? And if you feel like, yeah, I like to make decisions, I'm going to make decisions. We're going to go ahead and go to this.
Now, I'm going to go look at, for example, on that Cardinal Health, that stock is at $127. 76. So I want to make sure that price, $127. 76, and if I just put Cardinal Health there, we're going to sell Cardinal Health. Now, we're after hours. OK? I don't have an active market in the after hours. I don't see anything volume moving. I don't see tight bid-ask spread. So this is going to be an order that we're going to talk about. Try to sell for tomorrow, okay? Now, a lot of times when people talk about selling, it's very very vague, so vague, I don't even know where we're going with the moving averages, really. It's just one thing-it's how aggressive do you want to be?
Okay, you want to try to get out earlier right on the short-term moving hours if you want actual kind of more confirmation, the cross of the 20-period moving average going red and last one all three. And the biggest thing is there-it's just kind of how early, middle, late do you want to be? Remember what I always said: the confirmation is not free; you give back price, okay? The price has to go down more to get the confirmation. There are pros and cons of being early and later. I'm going to go confirm and send send the order now. I want to also go back-I'm going to give you a little test on this next one because we just talked about this yesterday, alright. Tell me why I'm bringing this up.
Why am I bringing up Philip Morris now? Philip Morris, look at the chart, tell me what you see, and then we're going to talk about all new positions here. I'm telling you right now if you want to be a good trader, you got to think fast. Okay, you got to think to what I've actually taught why did I talk about it? Okay, so first off when we look at Philip Morris we got a target up here and if we go back and really take a look at this what you're now going to see and if someone says well show me where you got in well let's do that it was on 123 alright so 123 what about six days ago ish. We go back and say where, where did that what uh, where was that on the chart?
Let's show that 123 was right there. Now, if we kind of graded the entry, we would say well James, that's consistent with a little breakage of maybe a resistance line. It is also consistent with the principle and the practice taught-a call hold close above the high of the low day. And we had a target right up near the top. Now, we mentioned yesterday if we have a target at 131. Okay and where was the high, well that high was 131. 36 now why am I bringing this up, well because it kind of goes back to we had a target at 132, I it doesn't matter if I was there or not, doesn't matter, doesn't matter, we were 68 cents away from that so here's your quiz, tell me where the stop is if I want a one-to-one reward risk ratio assuming that 68 cents was left to hit the target then what would be the stop adjustment, what would it be, think fast, well we would just take well what was the high, 131.
36 and we had 68 cents uh 64 cents is that yeah 64 cents to go to the target so if I'm trying to get that 64 cents left then that means that we're only going to give back 64 cents down from the highest intraday price so the stop would have actually been or is going to be moved to 131. 36, tell me on this have we done a good job or a poor job well it's poor job because this trade should already been knocked out the stock currently is at 129 . 59 and so it's about a dollar less than where the stop should have been, we're still in the position, so what I'm going to do is I'm going to go ahead and move this up to pretty much the current price because if we set a stop like a risk-reward ratio of one to one or one to one and a half there's a really good chance that we would have already gotten out of this position.
Now, again, if I looked and said 'Let's go to Trade tab for just a sec is there an active market in the after-hours? We don't see that two dollars wide there, and we don't see volume moving at all. Okay, might not have an opportunity until tomorrow morning when the market opens. Those are two things I think we had to address. Got 20 minutes here, let's talk about some new ones, okay? Now as I do this, I want to just take a quick look at two stocks now. One of the stocks we've talked about the last two three days is a small company called Starbucks. Okay, now Starbucks for example, just quickly, they announced uh their earnings today and this is where we want to talk about some turnaround stories, okay?
Now what I want you to kind of get is an understanding-we're not just buying ticker symbols, we're buying businesses that publicly Trade okay, now when you look at let's say Starbucks, you need to have an idea of really what's going on and what's going on and what's happening with the earnings call. So, did anybody read it now by the way, Starbucks? If you really look at this, they had a pretty good pop; it gapped to the upside at 102 and rammed its way to 110. I don't know maybe someone enjoyed it okay, I don't know, uh. Now if we go back to this, I want to pull up kind of what they said: now they're into the earlier stage of the turnaround.
Okay, and now what you're going to see is there's a lot of people that are going to be buying some initiatives, same-store sales growth that could be modestly positive so the thing was they recorded a four percent decline but the investors were expecting a 5 . 2 percent decline. Here's what's kind of funny, this is like telling your mom or dad when you're in school-Dad, I, Mom, Dad, I think I'm gonna get a D in class and you get a C and it's they're they're not thrilled but at least it wasn't a D, that's pretty much what happened with Starbucks. Now the thing is, if you go down a little bit further down, they're really expecting going around turning around, uh, they're trying to control cost and the bit the biggest actually thing is when you look down here at the bottom, they're really looking for the same store sales to turn positive.
So why do investors buy it ahead of the actual news coming out? But they are positive-well that's the whole point of investing, you're trying to control the cost of the business and you're trying to get in before the actual happens. Okay, so if we take a look at Starbucks, that is a position that we actually own currently own 100 shares. I'll talk more about the derivative piece tomorrow but that was a decent little push there-stuck T-Mobile just real quick also had a quick a little push to the upside and when you look at T-Mobile, uh, one thing I just want to kind of say right there is when you take a look at T-Mobile, same thing we want to read what that is actually kind of saying and we're going to look at the derivative piece tomorrow, but that was a good thing, let me kind of pull that up.
T-Mobile, yep, loaded, and the biggest actual thing is if you look at this, they went up to 257 a share, they were up from $1. 67 the previous year. Can anyone tell me what the percent year over year is that? 60, okay, 257 over $1. 67 is 53. 89, okay not bad from a from the year previous, okay the estimate was 229 they got 257 that's a pretty good estimate, but you know what that's really interesting is when you take a look at this-you want to compare that to their competitors are their competitors getting that type of jump and if they're not getting that type of jump there might be a kind of more of an interest in what T-Mobile does. Now we pull up let's now by the way, what sector is T-Mobile?
And again, just real quick, can anyone remind me? Now some investors also like to look at weekly charts, okay and if you look on a weekly chart, what do you notice now John actually says my Starbucks hit target 110 yes it did, okay yes it did hit the 110. Now if we look at this, I kind of call this that the moving averages. Are starting to pinch BJ, what does that mean to you Silas? What does that mean to you if those moving averages are starting to pinch? What does that even mean? Well, it means that we have bullish momentum. Wait, if you have bullish momentum the moving averages might get closer and closer together maybe even cross and all of a sudden those longer term investors might want to try to come in and buy that little bounce or the dip and/ or the crossover.
Now what I'm going to do on this first trade here and this is where we're going to let it kind of rip, is we're going to kind of go back and say well look maybe this stock kind of comes back and maybe retest some gaps so trade number one, that we're going to do here real quick and we're going to kind of do a couple of these here and we're going to do a couple of these here and we're going to go to this uh in the paid money account. We're going to go to Starbucks and I'm just going to say, look maybe that stock kind of comes down a little bit not excuse me team bring that up there we go right chart and what I'm going to say is maybe it just kind of comes down a little bit this little old plateau right here we're just kind of wondering might that be a little area of support.
Okay now what I'm going to do is I'm going to set like a buy limit. order what's the price of the buy limit order the where i right clicked on the chart we're going to put it 233 . 66 okay now the upside the prior high what some traders call target area number one is that is really 248 ish now what i'm going to do in this case is i'm going to go back and type in 248 limit data gtc and then the stop where was this old breakout area where was it answer it was right about 222 so if i set a stop underneath 222 less two percent it's going to give us a stop at 217 . 56, now some investor might say, I'm not going to set my stop that low, that's fine.
Okay, the paid money account is going to set the stop a little lower; it wants less chance to get stomped out and allow that trade to try to play itself out. Now when we go back to the position size, okay, when we kind of look at this and say, well, how many shares could we do? You're going to get a little bit of a stop at $217. 56 if we chose let's say 6500 worth of capital; how many shares would that be? Answer: okay it's going to be about $65,000 / 233. It's going to be about 27 shares of stock, okay, so we're going to buy 27 shares of stock and we're going to see if we can't get that stock to uh bounce uh pull back just a little bit.
By the way, how much are we expecting maybe here wanting? I should say just about a buck 50 if it goes down a dollar 50 it kind of be at this where this old support was. Okay, now I'm also going to take this GTC you might put like a time stamp of how long that order is good for many people that are trying to maybe buy in a little dip they might say hey I want this to maybe only go for five days and then that's it if we want to do that. Simple, click on the gear slide this over and say look you got five you got a week let's just say week we'll go to february 6th ish february 5th you got five you got a week to to get this filled if it doesn't fill cancel okay, that's all it is.
So this is a buy order but it's only good for a certain amount of period of time now the problem with this order is if it goes higher so we might want to keep keep an eye on that t-mobile to see if it starts to bounce noted confirm send first trade we're going to go to the first trade we're going to go to the second trade we're going to do here is buying the shares of t-mobile now remember we we had actually meta we targeted out yesterday we have shares of google which i'll come to in just a sec and then we don't have shares of netflix so if we buy t-mobile if we get filled we're pretty much kind of packing the area of the communication sector which has been kind of stronger lately okay now what we're Going ahead and doing read that order in red is that okay, if that's fine, we're going to send the order fire in the hole.
Now I want to go back to Google and I'm going to Google, tell me if this is broken down now. The one thing is when you look at our stop, we have a stop and it's sitting right here at 186. 57. Now if you look at this position, we haven't been stomped out but it did pull back, don't like it, but it's still kind of playing itself out and has earnings upcoming. All right now when you take a look at let's say uh Google here, I want you to also kind of notice that uh it's in a range of what's going on right now. So if you look at this position It's in a range, but the range overall when you go back and look at this let's say three-year weekly chart, it's still above that old breakout level so on a weekly chart we're still seeing that that breakout is still holding, so keep an eye on that.
Okay, so obviously you had some kind of correlation with what happened with Uh Deep Seek, okay, and the tech space, even though it's maybe not semiconductor-ish, still kind of got pushed around, and you're going to see that it's still kind of there now. The other one we'll just make mention of just real quick is when you look at Meta, we talked about the yesterday's 675 level, it's still at the Top of the Channel Solar at the top of the channel has not come back down, that we're going to keep an eye on, now I do want to go back to just real quick. Lulu is one that we talked about yesterday, that keeps spending some time up at and or above resistance.
Now this is where I want to kind of look into the fundamentals a little bit: why is this going up? Why when the market fell down? Why did this not go down? Now if you look in the last couple days, and I'm just going to count to three... Okay, so we had the first sign of entry was right there; the second sign of entry is right there. Notice on that second sign of entry, the 20 period Moving average went green first, okay, and then last, but not least, the moving average crossover is three, okay. So now let me ask you a quick question: how many of you like to take the entry of number one? How many of you like to take the entry of number one?
How many of you say there's no way I would do that; I like the number two or how many of you say, 'Look, I don't have red hair.' Okay, I don't do those things. I want more; I want number three. Now just real quick: if you take this now, give me a number you like one, two, or three? Which one do you like, okay? Josh actually says he likes number one, okay. So something... Now here's the nice thing about number One, if you're wrong, you know quick, okay. If you're wrong, you know quick, okay, but you don't have any confirmation, but it's the early sign of any potential buying at all, and if you're wrong, you're probably wrong small; you wait till number two, you're buying a little elevated off support member, the confirmation ain't free meaning to get that actually 20-period moving average to go green.
You got to get the stock to go up more. What does that mean? Well, the higher the stock goes up off support, the more risk per share you're taking right, and if you say well I'm going to wait till three, well it has to even go up higher and you're buying. Higher off support, remember confirmation isn't free, okay. Now, if we take a look at this, I want to go just real quick to the Swabb. You're going to tell me right now, you should get acclimated with really taking a look at not just buying stocks like ticker symbols. You should be thinking like a business owner. Some of the best investors I've ever ran into they think like a business owner, by the way, it's she and he, it's not just him.
Okay? Now, if I went to, let's say Lulu Lemon, and here at the very top, let's kind of think of this like a business owner, and we're kind of looking there for maybe some turnaround stories. Now, if you look at Lulu Lemon, we know what the chart is showing, but I want to kind of go down to kind of some of the fundamentals just real quick, and then look at this group now. We know that some businesses are cyclical, okay? So, if I said I don't know what that means, okay, thinking like Christmas, right? The business is cyclical. If I said you H&R Block, that's right; certain times of the year they tend to do better. What you'll see is in Lulu Lemon in Q4, okay?
The end of the year, that's when they actually have the biggest punch in terms of the actual historical earnings, the others-first quarter of the year, second quarter, third quarter. It's okay, it's pretty much Christmas time. They're making or breaking it around Christmas, around that Christmas time. Now what I'm going to also do is if we take a look at the P/E, the trailing P/E is at 29. 57, the 4P is at 28. 60, 63. Not massive, and the PEG there is at 2. 97, really not that high. Now if we scroll down a little bit, there's kind of some companies that we've talked about in watching #1 is Deck, you guys remember I was talking about Deck? What has Deck been doing well? Let's take a quick peek.
If you look at Deck, okay it's been decking the halls, side a little push here. Okay, we were kind of back in this area of 210-ish, did go up a little higher. 222, but who's watching? And if you look at that, that is coming in, earnings, Deckers outdoors. Remember when we talked about flip-flops and thongs? Remember that some of you couldn't believe we called it thongs? Some of us on the East Coast they call them thongs now. If we take a look, some of you're gonna remember now. Now, if we go back to Lulu, I want to actually pull this back up and kind of look at the numbers here and see if we can get a little bit of a push here just briefly.
Now, when you look at Deck's earnings per share growth forecast, and this is what you really kind of want to watch. A technician is going to look at the resistance. What that price target might be, well fundamentalist they want to look at the forecast of earnings per share, uh CAGR, compound annual growth rate right CAGR, Cargill, uh you're going to get a little bit of a push here and so remember net profit margin that's historical, so when you look at this one of the strongest ones it has been Sketchers, SKX won't have time to look at that but that's also been very strong, you're going to see number two is actually Deckers and the fourth one Ralph Lauren has been very strong, is actually LULU.
Now when you talk about actual margins okay net profit margins seventeen percent now let's kind of Think about this in terms of a business owner when you think about net profit margin, there might be people that are willing to pay a premium for the product. Now is that a bad or a good thing? Now if I bring this up, well, you're now going to look at this. I want to take this TPR out and I want to put an Apple for just a second-okay this one on Ralph Lauren. I don't want to do that; I'm going to throw in Costco and then what I'm going to do on this next one is I'm going to throw in an example, given maybe like Amazon. Okay, I just want to show you a little variation.
Now if you look at Lululemon, Apple, Costco, and Amazon-all businesses aren't the same; some are. Actually, trying to sell price-less margins and some are actually trying to sell at higher prices and fatter margins but you don't get as many sales now. If you scroll down a little bit, I want to just kind of show us the differences so when we look at Lulu, seventeen percent deck, eighteen percent. Now, look at Costco-oh, it's only 2. 9 and it's only 8, but guess who's the fattest net profit margins, yeah the company that sells really high-priced items, but they keep them, they seem to last longer sometimes, sometimes not a recommendation. Now one thing I want us to kind of watch right here is when you take a look at this: the companies that kind of might have a higher growth that tend to also have a higher PE okay.
So, you got to understand that sometimes now what we're going to do in this case is we're going to come back to Lulu just real quick and we're going to buy that position now when you look at Lulu, we're kind of at the spot where Jeez, we already got above this old high. Some investors might say, well I'm going to wait for a pullback, and you can make a t-shirt that says I'm still waiting for the pullback that I never got in and people probably laugh at that okay, they would know exactly what you're talking about right now. What I'm going to do is I'm going to set the stop. Underneath this 20-period moving average, 393.
Now what I'm going to do there is I'm going to take 393 and set that stop loss at 2% and we're just going to try to put one of our feet in the water in the paper money account and just say look, we're going to try to get in some here, okay, 385. 14. Now maybe the investor says well one way I could try to just get in is maybe just try to get in a portion of what we normally buy. Well if we normally buy sixty-five hundred dollars or another thing, let's say the stock, maybe we just buy $4,000. The investor might say, look, I want to leave some dry powder, some people say. If we were to pull back, they can buy on the dip on the price, if they truly mean that.
All right, so here we go. So we're going to take about 2/ 3rds of a position. And understand that you don't always have to go full position, OK? So if we normally buy $6,500 with the stock, let's say we take it to $4,000, OK? It's about a third less. If we pull back, we're going to try to dollar-cost average a little bit. And it's really going to be about, well, we'll round up to 10 shares, OK? If I did 10 shares, there you go. Now, target-wise, how would you measure a price target? Well, classic here would really be 370, OK? You really got 405 on top. And this is a really good target. So if we pull back, we're going to try to dollar cost average kind of like day one of technical analysis, channels, James Channel Boy, right?
And if we just add that on top of the resistance level, it's going to give us a price projection of 440. Now, what kind of might give us the idea that maybe Lulu could do that? Well, if Deckers comes out with their earnings, and they're quite well, it could influence Skechers. It could also influence Lulu. A lot of people always look at, like, well, I'm going to look at my company's earnings. But that's pretty, like, narrow view. You think you're the only company that matters. You should also be looking at the competitors. Think of the competitors, OK? So if Deckers is announcing, you should be watching Deckers and saying, how does that relate to this company? Remember, they're in the same space, OK? Now, we know Deckers does sporting goods and things like that.
But they do have fashionware, right? Stretchy pants and all. Now, what I'm going to do is I'm going to put that target here at about 440, OK? So here we go there. Data GTC. So second trade we're going to do here is a Lulu 440 target. Stop actually 385 . 14. Now, remember, why don't you take a full position? Some people are uncomfortable. They like to see a breakout pullback, trying to leave a little capital there to try to add. Sometimes that pullback, it sounds good. It doesn't sometimes materialize or you're not really watching, OK? Life gets in the way. You just kind of forgot, OK? Now, confirm and send. Now, what I'm going to do is here, that entry, target, stop, OK? Now, the one thing to kind of remember is we all have mobile devices, right?
If you're not watching in the morning, you might say, hey, James, you know, if I don't have a computer with me, I could bring up an iPad, a phone or whatever and just verify. Where's the price of Lulu in the pre-market? To get an idea, might this fill right at the open? You can see that, OK? We're going to go ahead and send the order. Read that line in red. If that's OK, send the order. I'm just going to say this in 30 seconds. Other stocks that we're going to keep an eye on is BlackRock, OK? Financial management. We're going to also keep an eye on, for example, like a stock like Meta. Excuse me, not Meta. MET, MetLife.
A lot of these insurance companies that are doing a lot of these things, they're going to be taking a more conservative approach to this. We're going to keep an eye on the stock that's going to be putting in the earnings here. Wells Fargo, OK? Wells Fargo kind of showing a little cut pattern. Not much of a pullback either. And the other one we're going to keep an eye on, last one is TTWO, OK? Keep an eye on that as well. That's one that's kind of coming into the resistance, and you got earnings there. This earnings can really give us a catalyst, sometimes, to get price movement up or down, OK? Now, I'm out of my time here today. I want to give you a quick reminder that you can also go to our YouTube channel.
Yep, Nike. Yes. Watch that. So there's our link to our YouTube channel. Second, you can also follow us in the class right there. You're going to notice that this is the class link that shows all the previous classes that we've done, and you can go back and see those. They've all been recorded, they're right there for you, okay. I'm out of my time here today, we'll come back tomorrow with futures, I want to say thank you so much for your comments and your participation. Thank you, Connie, as well. Remember with what we did discuss here today was done for example, illustrated purposes. This has been the class on trading growth and value. Have a great afternoon, we'll see you back tomorrow morning with trading futures live. Take care. Bye-bye.
