At around 3 p.m. on June 29, an hour before the close of equity trading, the Fed announced a change to the swipe fees associated with debit card transactions. The Fed decided to reduce the rate for these swipe fees from $044 to $0.21 cents. This announcement triggered an extremely strong surge in the price of the credit card companies, namely Visa (V) and Mastercard (MA)
No doubt some of you may scratch your head and wonder why a decrease in revenues is cause for excitement. Lets get in the Delorean and go back to December of 2010. At a meeting back then, the Fed had discussed decreasing the swipe fee to as low as $0.12 per debit card transaction. That piece of news caused a precipitous price decline.
In the months since December, Visa and Mastercard have regained their prior upward trend and closed the gap caused by that news.
Two of the fundamental rules of trading are
As you can see in the above chart, yesterday’s price action brought Mastercard close to all-time highs.
The smart money started exiting these stocks after they had crossed the 10% threshold and is now waiting for a pullback to possibly reenter the trade.
Smartstops has the short-term stop on Visa at $72.66 and the long-term stop at $70.43. The reentry signal was triggered yesterday at $81.11
Smartstops has the short-term stop on MasterCard at $258.49 and the long- term stop at $258.34. The reentry signal was triggered yesterday at $288.57.
Editor's Note: For more, visit SmartStops.net.
No doubt some of you may scratch your head and wonder why a decrease in revenues is cause for excitement. Lets get in the Delorean and go back to December of 2010. At a meeting back then, the Fed had discussed decreasing the swipe fee to as low as $0.12 per debit card transaction. That piece of news caused a precipitous price decline.
In the months since December, Visa and Mastercard have regained their prior upward trend and closed the gap caused by that news.
Two of the fundamental rules of trading are
- Buy low and sell high, and
- Sell on excitement.
As you can see in the above chart, yesterday’s price action brought Mastercard close to all-time highs.
The smart money started exiting these stocks after they had crossed the 10% threshold and is now waiting for a pullback to possibly reenter the trade.
Smartstops has the short-term stop on Visa at $72.66 and the long-term stop at $70.43. The reentry signal was triggered yesterday at $81.11
Smartstops has the short-term stop on MasterCard at $258.49 and the long- term stop at $258.34. The reentry signal was triggered yesterday at $288.57.
Editor's Note: For more, visit SmartStops.net.
No comments:
Post a Comment