Thursday, April 12, 2012

Case Proved Markets watch Cramer

Yesterday Jim Cramer talked to the CEO of Energy Transfer Partners (ETP) on the show Mad Money.

The CEO was very upbeat about the natural gas pipeline and distribution companies prospects. The company does look interesting to me.  I am looking to buy in a few weeks or so.

In a previous post I warned about jumping in too soon after such a presentation on TV. ETP stock price today is a perfect example.

The stock opened today at $46.40 and in minutes was trading at $46.83 as the morning closes it is trading at $46.74 a little off the high but still at a premium. 

Trading volumes are also high, yesterday the stock traded 400,000 shares today it traded 428,000 shares in the morning session alone.

My case, Market Makers make a killing when popular programs like Mad Money on CNBC talk about a partuicular stock. 

Watch out for the sudden urge to jump into a stock picked on programs such as Mad Money, they are not neccessarily bad stocks, but you will see inflated pricing on them for a few days. Hold back, ok you may miss this spiike in price, but you will also not be paying over the odds for a stock that begins to fall to its old level in a few days.

Mark the stock, wait patiently on the sidelines and when the stock stabilises buy then and enjoy reaping greater profits.

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