Stocks are easily damaged by anything - ETFs not so much!
One of our philosophies at Optik is to focus on the SPY as well as other ETFs. Why do we do this. It is because of the susceptibility of a stock to be damaged by any type of news or analyst downgrade. Just recently we have two prime examples of this. First, the CEO of Best Buy (BBY) was reporting on an excellent quarter for BBY but in his report he decided to state that Best Buy can’t maintain it sales. The stock suffered its worst decline in more than a year after CEO Hubert Joly provided that warning. The stock moved down about 12% and the options dropped incredibly.
In a second example, Golden State Warriors star Kevin Durant took an unexpected shot at Under Armour (NYSE:UA) yesterday during an interview with The Ringer, causing shares to slip more than 3%. "Nobody wants to play in Under Armours. I'm sorry. The top kids don't because they all play Nike (NYSE:NKE)." Durant's teammate, Stephen Curry, is the inspiration for the UA basketball business.
It is really easy to see a stock move substantially these days on off the cuff remarks. We take great caution in the selection and the issuance of alerts involving a stock.