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Volkswagen AG (VLKAY): Could it be a Buy here?

Sep 23, 2015

The scent of fear is pungent. 

Shortly after Volkswagen AG admitted cheating on U.S. vehicle emissions tests, the stock gapped from about $37.50 to less than $25 in a heartbeat… The company was smart enough to fire CEO Martin Winterkom, as a result of the scandal.

According to reports, up to 482,000 of its diesel cars are spewing nitrogen oxide at more than 40 times acceptable levels. As a result, The U.S. Environmental Protection Agency says the company could face up to $18 billion in fines because of this.

It’s a real mess… One that was quite avoidable, though.

However, now may be the time to buy… and hold for the long-term. Once this blows over, I expect business as usual. Take very small bets here on oversold technical reads.

Biotech Stocks: Buying the Fear

Sep 21, 2015

Greed kills…

It’s as simple as that.

As much as we want to blame a presidential candidate’s tweet that sent biotech screaming lower today, most of the blame rests with a CEO that decided to screw folks with a 5,400% increase in price per pill.

Folks depend on specific medications, oftentimes so they don’t die.

For a CEO to charge $750 for a single pill that they paid $13.50 for the other day is ridiculous. This is a drug that treats toxoplasmosis caused by a parasite that can be deadly, especially in those with weak immune systems.  That news of the drug price pump was enough to get one candidate to say, “Price gouging like this is specialty drug market is outrageous. Tomorrow I’ll lay out my plan to take it on.”

That was enough to scare the hell out of those in the biotech sector – already deemed over-inflated. The news was also enough to send the NASDAQ Biotech Index (NBI) down more than 150 points on the day.

While the fear of further decay is likely for biotech, immediate term, I still strongly believe – as I have since 2008 – that biotech is one of the safest places to invest… especially over the next 20 years. We’re buying the dips.

 

 

 

Restoration Hardware (RH) was a Screaming Buy…

Sep 17, 2015

Two weeks ago, I recommended a buy on the Restoration Hardware (RH) November 95 calls as the underlying stock traded at an oversold $91.89. All of our technical indicators were on the floor – including MACD, RSI and Money Flow…

Today, the stock hit an intraday high of $102.48.

That’s a $10+ move in two weeks. It was enough to send those RH November 95 calls to a high of $9. If you bought in, sell to close to secure gains, as the stock begins to push into overbought territory.

Congratulations on another quick win…

 

Taking Gains: Why I Bought China…

Sep 16, 2015

About a week ago, I noted China was overdue for a bounce…

I was mocked. It happens. Not big deal. I noted that a great way to trade China here is by buying the Direxion Daily China Bull 3x Shares (YINN), the iShares MSCI China Index Fund (MCHI) and the iShares FTSE China 25 Index Fund (FXI).

We were able to buy the YINN at $18.50. It now trades at $21.20. Sell half.

We were able to buy the MCHI at $44. It now trades at $46.36. Sell half.

We were able to buy FXI at $35.70. It now trades at $37.62. Sell half.

Given the near-term volatility, I’d feel better securing partial gains on each.

 

Zumiez Inc. (ZUMZ): Another Immediate Buy…

Sep 15, 2015

The last time I traded ZUMZ it just gapped from $30 to less than $24. Incredibly oversold reads on MACD, MFI and RSI got us in as the stock found solid footing. Close to 14 days later, I was out of the trade with a gain of 186% using the August 25 call options....

And I believe we can pull a similar gain, as the stock gaps down from $22.50 to $14 a share. Again, it’s oversold on MACD, RSI and MFI as seen below. And it’s only a matter of time before it pops higher…  I want in now. Consider buying the stock up to $15 and / or the ZUMZ November 2015 15 calls up to $1.35.

 

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