Berkshire Hathaway entries looking amazing!! BRK.B Hey traders, here is another great opportunity to purchase a great company with record high cash balances. Current cash balance = $125 Billion USD
For more than a year, markets were perplexed by the abnormal cash balance of Berkshire Hathaway Inc. NYSE:BRK.A NYSE:BRK.B and whether Buffett would ever get a chance to complete a large acquisition with that money, as there seemed to be no way that markets would enter bear territory any time soon.
However, what many considered impossible has happened, and both the S&P 500 Index and the Dow are trading more than 20% below their recent highs, according to Bloomberg data. This has improved the prospects for a large acquisition, and successfully completing one could be a catalyst that drives the share price of the conglomerate higher.
So lets get straight to the fun stuff!!
Before entering a trade three types of analysis should be performed.
Fundamental Analysis = The study of financial statements and economic news. (Overall Trend)
Technical Analysis = The study of chart history. (Entry & Exit Strategies)
Sentimental Analysis = The study of the markets current psychology and traders psychology.(Instinct)
After performing the three analysis below are my results:
NYSE:BRK.B
Fundamental Analysis = LONG-TERM (BUYING)
Technical Analysis = SHORT-TERM (SELLING)
Sentimental Analysis = Market fears currently higher than confidence.
To better explain:
This means that right now momentum is headed downwards technically but the overall trend is up fundamentally.
So since we know the overall trend is upwards but we are currently headed downwards it creates the perfect timing to use our Fibonacci Retracement tool. A tool that is used to find important entry and exit levels in a trending market. Which is traditionally applied to the low & high of a trend. Here were my results:
As you can see in the chart above we have already retraced with a spike below the 38.2% level at $190.02. Markets are still showing downwards momentum that is headed towards the 50% level - 61.8% level.
MY SUGGESTION:
Place LONG orders totaling anywhere from 1-5% of your total trading capital on each retracement level below:
23.6% = $205.81 (BUY)
38.2% = $190.02 (BUY)
50.0% = $177.26 (Great trade opportunity) (BUY)
61.8% = $164.50 (What I consider the PERFECT IDEAL TRADE) (BUY)
78.6% = $146.34 (ABSOLUTE BARGAIN!!) (BUY)
Take profit: $231.61 at the previous ATH . (All Time High) Be patient and trust the process. This monster of a stock will most definitely return to break more records in the upcoming months when the continuation wave arrives and aligns with the fundamentals.
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