V: Play the Volatility

These markets are so volatile it could drive someone crazy if they just sit back and watch their portfolio. This market could also make you a pretty penny in a matter of a few short days. Take for example Visa. Visa is a solid fundamentally sound company. It is the largest credit card company by issues. Visa is expanding globally in all emerging markets and although there is an economic slow down occurring, this will not greatly affect Visa the way retailers are affected. Visa makes a majority of its profits from swipe fees it charges the merchant. Yes it is true that spending will be decreasing, however the decrease in the number of transactions occurring will be significantly less. Think about staple items for a household. People can not cut these items out altogether, so instead the household finds cheaper alternatives. This alternative still must be paid for and Visa is an option. Again because the transaction is still occurring the income for Visa remains. Now the key is how do we play this trade. Well I for one am young so I am playing Visa as a Buy and Hold. I have money locked away set aside for the sole purpose of earning a small dividend (.15%) awaiting the rise in stock price that I feel is inevitable. For those of you not interested in a long term play, there also exists a short term trade. If you look at the past 3 - 4 weeks, Visa has traded in the $50 - $56 range. These will be our support and resistance levels. Today as you see, Visa has approached the support level of $50 at the beginning of the trading session. This provides an excellent opportunity to get long Visa. by weeks end you should see at least a 2% gain should the stock continue to channel sideways. Good luck and watch those charts for key information on when to buy and sell!