Its interesting to see what people consider a “dumpster fire”. A day-trader will consider a -5% dip a terrible day…where an investor will consider it an average weekday. So as we quickly go through this list of 37 stocks, keep in mind, time frame is critical. My analysis is based on the daily and weekly time frames. I asked for your favorite “dumpster fire” stocks to evaluate which one is most likely to fully recover.
When I think of a dumpster fire stock, the first requirement is that the price action is below the 200 day moving average. Any stock that has price action below the 200 day moving average is an automatic, firm “NO”. You cannot achieve a local high, 52-week high or an all time high if price is below there. Period. So why buy it?
That said, these stocks provided were not dumpster fires per my strategy:
UPS 0.00%↑ , BE 0.00%↑ , INTC 0.00%↑ , MU 0.00%↑ , SYM 0.00%↑ , MRNA 0.00%↑ , AVGO 0.00%↑ , LMND 0.00%↑ , FSLY 0.00%↑ , ILMN 0.00%↑ , and T 0.00%↑
I will share my favorite from the above list at the end of the article/video, as some of them are absolutely within investable territory.
As much as I preach against buying the dip though, as it is fighting trend, I know some of you just love ❤️ to buy the dip. Here is the full list of tickers up for review and all of them have price action below the 200 day moving average:
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Now, even though the stock price action is atrocious…even some of my favorite past winning stocks in this list (that we sold off long ago)…there are still some great companies here. Good companies/stocks experience draw downs, sell offs and recessions nonetheless. So we can start with the absolute basics: Is the company making money? Yes or no. If a stock is to be successful in the future, it must be bringing in cash. We can measure this just by evaluating if the cash flow has increased annually.
With this simple parameter, we were able to quickly eliminate over half of the 26 tickers. Some special notes about these eliminated stocks:
Rigetti we traded for +54%. It was a good run. But it was a pure chart play with a volatility contraction pattern and a narrative pushing it. If you are still clinging to a hope and a dream…let it go!
I hate Microstrategy. Truly hate this company. They are essentially gambling with leverage. Its not if…but when…that explodes in their face. Saylor lost everything in the dot com bubble1 and it appears he learned nothing. He is a speculative gambler, a loudmouth and his commentary is typically near local tops. Additionally… I wrote this small piece: Bitcoin is a terrible investment today. Read that…then note you never hear of Saylor (or Microstrategy) having a huge win…but you do read periodically them take huge losses. Take that as a warning signal.
META 0.00%↑ is a pretty popular stock, known to typically recover. But that gap down on 29 October is a huge warning signal. Get price action back near all time highs of $796, before even considering it.
I also hate Chipotle. My family forces me to eat there often. 🙄 I once researched the commodities (rice, chicken, tomatoes, guacamole, etc). And it costs Chipotle about $.60 cents to make your slop bowl. SIXTY CENTS. Yet the prices keep going up and up! In fact the CEO is now talking about raising prices even further to target $100k income earners!2 Morally I find Chipotle to be a huge scam. That is just a personal rant…the chart looks terrible, for now, so stay away.
With 12 remaining stocks, we follow the same rules we do when investing in stocks already running: Are the shareholders making more money? It all comes down to shareholder value! Not saying I like it or support it…that’s how it is though. Another 4 are eliminated:
Roblox…our best trade from 2025 at +61%…has become a dud. The losses are likely due to the increased scrutiny due to predators inhabiting the platform so abundantly.
U 0.00%↑ was a trade we attempted, but had to cut because price action began to show noticeable weakness around the 16th of January. The heavy volume on the 30th of January and 11th of February confirms that institutions are offloading this right now. Don’t fight trend!
Now we are down to 8 companies, and have the very basic fundamental requirements met. And recall…you all are holding a gun to my head, forcing me to buy a stock today. I’m picking what I think has the best chance to go up soon after you watch this video. As terrible as the daily price action has been…some of these charts have great charts still on the weekly and monthly timeframe. With the notion “trend is friend”…lets eliminate the stocks that are still trending down on the weekly timeframe. It would just be doubling our fight.
Lyft is at the 200 weekly moving average…unsure whether it will break or bounce.
Don’t be surprised by technical bounces, I included “reconsideration” prices they need to re-achieve for potential trend shifts in the notes. Dead cat bounces are normal, especially with stocks like Draft Kings that are prone to short term hype or marketing campaigns.
