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Chart of Day: Consider Chimerix…

Dec 30, 2015

Earlier this week, shares of Chimerix (CMRX) dove more than 80% on news that a late-stage trial of an anti-viral to prevent infections in blood and marrow transplants fell short of expectations.

While many viewed this as dead stock, that may not be the case, as Steve Cohen’s hedge fund, Point72 bought a 5.3% stake in the stock. And from my understanding there’s still an FDA review coming up in February 2016 that may serve as a catalyst.

Let’s take a small position in the stock and options. But only open a small position. This stock is still a bit volatile after the latest news.

Consider buying the stock up to $10 and / or the CMRX May 2016 10 calls up to $2.

Have a very happy, healthy… and profitable New Year!!

Best wishes to you and your families…

 

Chart of Day: Short Natural Gas…

Dec 29, 2015

This may just be one of the easiest trades of the New Year...

Over the last two weeks, natural gas has risen about 31% after diving to lows of $1.77. Deadly cold weather gripping much of the country, and supply news is driving gas higher… The United States Natural Gas Fund (UNG) is up about 20% over the same time. But we highly doubt the run will last, given high supply.

We’re using the latest run in natural gas to short the UNG.

In fact, consider buying to open the UNG February 2016 8 put up to 60 cents, the February 2016 9 puts up to $1 and / or the April 2016 9 put up to $1.30.

Each should pay off well when natural gas pulls back…

 

 

 

Chart of the Day: Buy the Biotech Boom

Dec 29, 2015

You rally can’t go wrong with biotech…

It’s nearly impossible not to make money.

Over the last year, biotech accounted for more than $400 billion worth of M&A activity… and that’s not likely to stop, as bigger industry names hunt for new innovation to keep their pipelines fresh and relevant.

Just this year Allergan (AGN) and Pfizer (PFE) announced a $160 billion merger. ,

Johnson & Johnson (JNJ) announced its open to a deal.

Amgen (AMGN) is hunting for a multi-billion dollar acquisition. And Gilead (GILD) is shopping with $10 billion.

While there may be an occasional hiccup along the way – a well-placed political tweet, arrests, and price gouging – biotech will continue to outperform, in my opinion.

The biotech sector isn’t slowing. In fact, it’s very likely to outperform the major indices yet again. We have a $400 to $450 target on the iShares NASDAQ Biotechnology Index (IBB)...

 

 

Chart of Day: Barnes & Noble (BKS) at 52-Week Low…

Dec 28, 2015

After dismal earnings, shares of Barnes & Noble (BKS) sit at a 52-week low.

While many investors are now avoiding the stock, fear has become a bit overdone, technically. Using the chart below, we can see RSI, MACD and MFI are all significantly oversold. If we look at historical dips using the same indicators, we can see bounce backs shortly after.

All we’re looking to do here is profit from a quick bounce off oversold levels here, collect our money and move on. Consider buying to open the BKS April 2016 9 call up to $1 and / or the April 2016 10 calls up to 70 cents.

Have a happy, healthy… and profitable New Year.

 

Chart of Day: FedEx and UPS at Support…

Dec 25, 2015

Happy Holidays...

Even today, we're still hard at work finding undervalued gems.  Enjoy...

After a 2013 shipping debacle left Amazon vowing to never again to use FedEx or UPS, there are rumors that Amazon could launch its own delivery service. The fear of an Amazon third party logistics service has been damaging to UPS and FDX. But we have to remember that Amazon still relies very heavily on the two shipping giants, because let’s face it. Logistics isn’t easy…

And we have to consider that the absence of Amazon may not be terribly damaging to the bottom line of UPS or FDX. Over the last 12 months, UPS generated $58 billion in revenues. FDX generated $48 billion. Amazon had shipping costs of $10.4 billon, which tells us a loss of Amazon wouldn’t be as bad as many believe.

And even if Amazon does launch a third party logistics service, it won’t happen for quite some time. Logistics is no easy task.

Technically, UPS and FDX have found solid support after their latest tumble, as well.

After finding double bottom support just above $140 with oversold reads on MFI, MACD and RSI, FDX is just beginning to bounce back. We’d like to see a move to at least $160, near-term. Consider buying to open the FDX February 2016 150 calls up to $5.60.

UPS has also found historical support just above $96 a share with oversold reads on MFI, MACD and RSI, too. We’d like to see a move to at least $102. Consider buying to open the UPS April 2016 97.50 calls up to $4.60 and / or the February 2016 97.50 calls up to $3.40.

Have a very happy holiday… and a happy, healthy, profitable New Year…

 

 

 

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