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Berkshire Hathaway (BRK/B), Square (SQ), Fastly (FSLY) - YouTube
Channel: TD Ameritrade Network
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it is time now for the big three three
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stocks three charts three trades ben
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lichtenstein will take us through the
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charts and here to take us through the
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trades dan deming managing director at
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kkm financial glad you're both here
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i was taking a look gentlemen at the
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chart for berkshire hathaway it was very
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warren buffett
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it was so steady eddie
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right there was no volatility it just
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was up up up slowly but surely and in
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fact when i look let's see
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one year up 40
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i think most people would take it dan
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deming your thoughts
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well nicole you're right it has
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recovered nicely after some selling
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pressure about a month ago we're seeing
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a trend higher and it's challenging the
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top end of the range i think 297 was the
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high in may
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uh so we are continuing to push up
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towards this upper end of the range and
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earnings in two days so i do think that
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you know just from the some of the
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dynamics within the market construct
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right now some of the momentum we're
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seeing within some of the uh various
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sectors of the market that berkshire
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looks like it's gonna you know it's in a
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good position here to potentially
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participate uh should we continue to see
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some of these trends uh uh continue
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yeah i can't wait to see your chart in a
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moment and i know you said it looks
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ready that it possibly could break out
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ben what are your thoughts as you take a
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look at this chart good morning nicole i
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think dan hit the nail on the head when
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he mentioned the trend environment we've
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seen to the upside we were just looking
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at the daily
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as dan was speaking to those points been
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roughly sideways recently but as you
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just mentioned nicole poise for a
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potential breakout here is at the upper
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extreme of that range i'm dialed in on
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the more intraday look if you can pull
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up the 30 minute time frame there you
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can see as dan mentioned the
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well-defined trend environment to the
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upside off the 275 low that we saw about
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a week or so ago and uh recently up to
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291.75 i want to point out as we just
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kind of take a step back from this
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intraday look the 30 minute notice how
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as mentioned the daily had been kind of
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teetering around this well 285 level
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around the 50-day moving average and
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again now we're testing the upper
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extreme of this range up around 295
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those highs that we saw back in may if
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you remember lastly i do want to point
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out this is the kind of chart that gets
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me fired up nicole a high conviction
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move to the upside sideways
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consolidation you said steady eddy i see
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this as high energy again and high
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conviction and really no rejection of
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this upper level as of yet the bulls
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want to see a breakout up and through
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295 here but not only a breakout nicole
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one that has follow-through conviction i
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always say we want energy participation
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in terms of volume and then at some
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point we want to see some sort of an
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area consolidation form and an upper
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level we don't want to reject that and
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kind of v top so a lot to watch here but
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uh some bullish uh
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recent bullish activity into that key
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upper level that you mentioned earlier
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yeah and benergy we like your energy
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there ben because it's true right that
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big move up and then some consolidation
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then up again but over that one year i
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know the shareholders have to be happy
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dan take a look at the chart what do you
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think there well i think you know ben
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hit a couple of key levels there and
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that's when i look at the trade example
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that i constructed he really highlighted
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some of those levels that i was looking
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at and so you know when i look at this
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from a trading perspective as i
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mentioned we do have earnings here in a
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couple days but overall i think you know
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the upside momentum to me looks like uh
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it's poised to uh push through there and
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possibly make new highs here post
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earnings announcement
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but at the same time you know i think
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that uh there's another opportunity here
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if we do see some hesitation within the
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next month and a half so really the
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trade example that i've constructed here
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nicole is buying a call spread and then
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financing a cost of that call spread by
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selling a put spread underneath creating
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a range kind of trade you get to
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participate to the upside and reduce
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your out cash outlay and if we do see it
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fall off as ben mentioned 275 to me
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looks like support and so i constructed
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a trade where technically you would get
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long at 275 should the stock fall off
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here over the next month and a half
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yeah what do you think of that trade ben
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i like it and uh you know i think that
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this is important right now i like dan's
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approach in terms of what i'm hearing
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him say is that we're at a high
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inflection point basically as i like to
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think of it at this upper extreme these
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highs i mean we're going to move one way
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or the other quickly i think by
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definition we don't spend a lot of time
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at these high inflection points take a
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look at the weekly time frame this goes
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back we're talking to 97 and the rally
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that we've seen into 2000 the
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consolidation area that formed around
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190
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here's that area and then again this is
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a high conviction trade to the upside
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we're testing this key level right now
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this is going to be something for
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investors and traders to watch here but
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as mentioned i don't expect the market
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to spend a lot of time here one way or
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the other we'll either get a breakout or
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rejection of this upper level in a swift
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fashion soon i think
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right and earnings season really dan a
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quick thought on earnings season thus
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far as you know most of the names we've
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been seeing have shown us some good news
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they have they have you know certainly
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there's been the one-offs but by and
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large the trend has been very positive
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and particularly when you look at the
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financial sector now berkshire hathaway
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is a hybrid to some degree but
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nonetheless you know kind of does get
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caught up in that updraft in the
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financial sector and i think that's why
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you're seeing this nice run in the last
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week and a half prior to earnings
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because you're looking at these
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financial stocks continuing to uh push
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to new uh multi-year highs if not
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all-time highs as we continue to see
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those the trend develop post earnings
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within the financial sector
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right yeah and though the financials
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sometimes can get a little choppy when
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we start to talk about higher rates but
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it certainly has been an exciting one
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and of course burke b made it accessible
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to everybody because nobody can afford
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the a shares um
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that being said let's talk and move on
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to fintech and take a look here at
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square which is an interesting one um
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everybody talks about the exposure to
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bitcoin too dan
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yeah you know that and that's one of the
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highlights here is why i think that it's
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worth looking at um as we continue to
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see bitcoin recovering uh you know we're
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seeing a challenge in the august highs
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here and um it does feel like the
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momentum continues to shift now
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uh towards uh uh you know so the trends
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are starting to again in this instance
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similar to berkshire uh favor uh uh
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names like bur like square in this
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example in particular when you look at
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the trend in bitcoin because they hold a
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significant amount on their balance
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sheet so i think it's just kind of a a
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way to gain uh to some degree a little
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bit of bitcoin exposure if you don't
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want to enter into the market itself
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again participate in the capabilities
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that square offers as far as you know
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some of the um play i mean some of the
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segments within the payment uh area that
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they continue to uh you know be one of
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the best out there and i think from a
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trend standpoint you know i like the
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idea that uh as we move through here
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that i think it's going to continue and
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push up here and challenge the highs we
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did see earlier in the year and so i
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think that you know looking at a
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potential call spread uh in december
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would be a one way to play this upside
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momentum
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yeah and momentum for sure we talk about
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energy ben look at this one it's up 11
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this month alone and our friend dan
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dolev who appears on our network all the
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time since it was well below a hundred
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dollars he's been
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saying that this company and its cash
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app and exposure to bitcoin etc etc he
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keeps raising his target he's been right
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every time penn
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he has and i'm glad dan reminded us that
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the tie that we see in terms of bitcoin
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futures and
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square and with the rally that we've
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seen recently up through the 66 or 260
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7000 new all-time highs in bitcoin i can
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see why
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square's been bit up now i'm not
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necessarily buying into this one in
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terms of enthusiasm participation at
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these levels because although as you can
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see and dan mentioned a well-defined
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trend up another similar instance in
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terms of what we were talking about on
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the intraday activity in terms of brk
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and berkshire you can see how square has
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been off the 222 lows that we recently
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saw as dan mentioned trending higher but
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i do want to point out a couple hurdles
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still to get up above dan was talking
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about the august highs they're up here
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289 as we still have those levels to
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contend with just recently back above
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the 50-day moving average and
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but i do want to point out lastly look
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at the weekly
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same pattern in terms of what we've been
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seeing seeing as far as berkshire but i
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just want to point out a little bit of a
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difference in terms of where we are
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relative to that upper extreme so i'm
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just not as excited about this one now
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if we were gaining momentum and continue
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this bid up and through 280 opening up
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the door for a re-test yeah i'd be
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looking for as mentioned that energy
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that conviction that breakout but again
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i think that this one as uh we've seen
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up four weeks in a row has seen a nice
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run here but still a couple levels to
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get up above before investors can get
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really excited about this one on the
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bigger picture
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yeah it's tough when you start to have
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that big move and then you start to see
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those highs right and we saw that for a
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long time with the chart of tesla right
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everybody started to get excited but
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look at how it broke out and it's gone
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crazy and made this crazy move i wonder
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how square could move down you started
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to talk about your trade a little bit
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tell us more those those august highs
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what 289-ish tell me about your trade
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yeah and so basically you know when i
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looked at a trade example for this uh
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price action that we're seeing uh you
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know ben points out a couple of things
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that that i definitely took into
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consideration and that's why when i
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looked at trade example for this name i
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did a you know i looked at a call spread
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and i was looking at a december call
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spread to 262 90 call spread because i
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wanted to define my risk uh you know
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when i because i do think that there are
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the possibility here that square is a
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volatile stock and uh you know i i think
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that there's always the potential for
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some disappointment and uh therefore you
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know we have seen it in the past where
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square can fall off pretty quickly so i
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think risk definition was one of the key
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factors in uh putting together this
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trade example but at the same time uh
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this the you know the this dude these
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262 90 call spread you're paying a
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little premium uh above and beyond where
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the intrinsic value is so the square
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would have to maintain this momentum but
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it's a play back to those highs and
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that's kind of the the the reason for
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the trade example
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yeah that's a good one and you know you
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use the word momentum ben as you take a
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look here at dan's trade i you know also
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think about momentum stocks right and
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they always say you don't have to rush
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to sell your momentum stocks that are in
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your portfolio maybe take some of your
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profits right don't just jump dump out
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of your winners right well speaking of
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momentum and getting back to dan's point
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earlier nicole i think again we
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certainly saw some in terms of bitcoin
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the futures the run up to 67 000 but
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we've lost that momentum the ability to
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follow through similar to what we were
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talking about as far as what we would be
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looking for if we saw a breakout in
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berkshire uh we'd be looking for energy
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directional conviction and we did not
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see that in terms of bitcoin and that's
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why i think with square still below the
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key level as mentioned 280 nothing to
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get too excited about here especially as
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we see bitcoin pull back from the 67 000
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level now if we were to get up above
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this uh area here or into this
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heightened area of the upper extreme
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range that we've been in basically all
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year if we were to see bitcoin continue
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some momentum to the upside yeah then
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that would uh be something to watch here
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but we're still short of that at this
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point and so i'm not so excited about
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this one gives us something to keep an
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eye on here though
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not only in terms of square but also in
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terms of bitcoin futures
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yeah all right let's move to another one
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and that is fastly and it really is so
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far off that 122 high back
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in january what's going on here dan
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well yeah it came under some significant
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selling pressure as did some of those
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other names that really
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caught fire earlier in the year um based
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on more on some of the dynamics within
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just the
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flow of money into some of those names
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as opposed to uh actual operating uh you
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know uh i guess uh
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profit potential and things of that
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nature and but overall i think you know
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it's fastly is an interesting company
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it's still i think in the developmental
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stage you know it's certainly an
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interesting
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add-on piece uh to uh basically help
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developers you know uh
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but speed up or or make the uh internet
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much more efficient and delivering
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content so i think that overall
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it's a it's a player in the space that's
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going to continue to show potential
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upside as it evolves certainly it got
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knocked back down but when i look at it
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from a technical standpoint i do see a
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nice bottom if you look at the lows from
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october early october and early august
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we kind of bounced off there twice to me
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it looks like a little bit of a double
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bottom and now we're seeing some upside
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momentum we're seeing the 50-day moving
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average starting to shift higher and we
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do have earnings in the first week of
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november so implied volatilities are
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very lofty so i think you know it's an
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interesting setup i don't really want to
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chase stock here i think it's a bit of a
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risk as far as what the
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reaction to the earnings are but i
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wouldn't mind uh picking out the stock
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up at the low end of the recent range
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and also because of the high implied
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valves collecting some premium here over
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the next three weeks while we wait to
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see how this plays out post earnings
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and this move that you're talking about
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uh at least in some of it is attributed
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to a new u.s patent
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of a phrase that i guess we should all
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get used to that fastly just got load
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balancing across origin servers
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okay write that down memorize that but
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that has really helped this stock jump i
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mean you know i say this jokingly but it
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really has helped as you see ben you can
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see that this stock is up just this
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month you could see that big move one
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month 22
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yeah i mean uh guys similar to what
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we've been talking about in terms of the
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other two names berkshire and square on
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the intraday certainly a nice run up
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here i mentioned how berkshire gets me
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excited when i see that kind of price
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activity square i'm sort of sitting on
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my hands waiting for that next move up
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but let's dive into ticker symbol sq
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because this one a completely different
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story now similar pattern again on the
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intraday you can see that as far as the
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30 minute the trend environment almost
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identical to what we've been talking
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about in terms of the other two names
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but take a step back and you'll see a
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completely different situation we were
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talking about the trend up in berkshire
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how square has been holding upper levels
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but yet to break out look at the
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weakness that's been coming in terms of
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fastly and while dan mentioned how it
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does appear as if we're trying to bottom
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out down here but i just want to point
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out not only is the daily not really
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supportive of
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anything at this point to get really
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excited about as long as we hold below
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60 i think but
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very much range mount and still kind of
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just in the middle of that but look at
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the weekly here just a mess no real
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well-defined trend environment one way
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or the other this is something although
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we're higher four weeks in a row if we
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close positive this week something i'd
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want to stay away from
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if anything it seems like we're kind of
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forming these areas of balance and
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consolidation at lower levels right now
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very random the way i see it between 40
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and 60 inches
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not a lot of directional conviction one
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way or the other here this is one i
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would shy away from or as we often times
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talk about markets that aren't trending
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very well on the uh larger longer term
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picture you have to kind of uh trade
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this on a more intraday basis a more
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granular level and ultimately you're a
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bit more susceptible to some of the ups
[952]
and downs the chop that we've seen in
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this range 65 again to 40 are the areas
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i'd be watching
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okay dan your final trade here on this
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one
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yeah well i think ben just framed it
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very well and i understand where he's
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coming from here i think the the the
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reason i kind of took a look at this uh
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is it's a stock that i have filed for
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the better part of a year and also
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because of the fact that you're looking
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at very lofty implied volatility levels
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implied levels going into earnings which
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makes sense uh given that that stock can
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show some volatility
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that uh i'm looking at it as a return
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profile more so than than you know a
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play as to the bottoming of the stock
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however
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again if we do go down and test those
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low end of the range that's a level i
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think that you that it's more compelling
[999]
at this point but in the meantime i
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don't mind getting paid while i wait to
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possibly pick up the stock at a better
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level so i'm looking at a very short
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dated while relatively short dated trade
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just the november expiration three to
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three weeks away
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um with uh selling the 45 40 put spread
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and collecting again about a buck 10 or
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so uh so that's two percent the way i
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look at two percent versus the stock
[1022]
over the next three weeks with the
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opportunity to get put in the stock at
[1026]
basically near the low end of the range
[1027]
which seems to be reasonable support
[1030]
and um you know and again the return if
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you extract that out over 12 months i
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mean that's pretty compelling if you get
[1037]
two percent on less than a month return
[1039]
profile
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yeah
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great stuff thank you so much dan deming
[1044]
dan dumming kkm financial nice three
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trades there ben lichtenstein i'm not
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one for nicknames but if i had one i i
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could give you benergy because you're
[1055]
always energetic and and bringing it to
[1056]
this great segment of the big three
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thank you both dan and ben nice to see
[1060]
you both thank you
[1083]
you
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