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Caterpillar (CAT): A 150% Gain in Two Weeks…

Oct 14, 2015

It doesn’t get any easier than this…

On September 27, we recommended a trade on the CAT November 65 call up to $3. We had an entry price of $2.30 shortly after.

The stock was found oversold on MACD, RSI and Money Flow. So we bought the fear and waited. Two weeks later, the stock is up to $70 a share, taking the call option to $5.75 – a 150% gain in two weeks.

Consider selling to close half of the trade to secure the gain.

Oftentimes, we are told to ignore stocks making new lows.  But ignoring them can -- and will -- cost you.

After 16 years of system development, market strategizing, and back testing, I noticed an unbeatable trend that most herd-like investors run from.

We’re often told:

“Never buy a stock hitting a 52-week low…”

“Stocks in downtrends tend to stay in downtrends…”

“It’s too risky… It’s not safe…”

“Any stock hitting a 52-week low will always be weak…”

Or, “nothing is more destructive to amateur investors than thinking that a stock trading near a 52-week low is a good buy…”

But that’s not true. Such lows can highlight great opportunity.

As I’ve learned over the years the time to buy is “when blood is running in the streets… even if that blood is your own.”

Those were the very words of Baron Rothschild, whose family is now worth a staggering $400 billion. Time and time again, the family kept cool heads during times of absolute panic, making a fortune from the Battle of Waterloo and countless other events.

I’ll admit it’s a hard maxim to follow.  Your instinct is to follow the herd. It’s counter-intuitive to run into a burning house not knowing if you’ll come out alive.

Investors run scared.  And they don’t know it but they’re selling everything at the wrong time. But as Warren Buffett will tell you:  “Be fearful when others are greedy and greedy when others are fearful.”

Every one is afraid of the burning building.

But the best time to “rush” a “burning building” is when things look grim for big companies that will never see the inside of a bankruptcy courtroom.

 

 

The Ferrari IPO: A Cheaper Way to Trade It…

Oct 13, 2015

Next Monday, newly minted shares of Ferrari [RACE] will roll onto the showroom floor.

A potential offer price of between $48 and $52 a share will give way to explosive upside, given high demand and investors giddy with anticipation.

Institutions are already frothing at the mouth, ready to unload at intra-day highs.

Unfortunately – as always – it’ll be the little guys [you and me] holding the bag at the end of the day with a company that’s not really looking to dramatically increase sales, limiting future growth…

The overpriced, over-subscribed stock will eventually give way to a sizeable drop, leaving many to ask why they bought in the first place.

We all know the IPO game has always been rigged against the little guys. But there’s a simple, proven way to profit each and every time…

The First Trust IPOX-100 (FPX)…

I’ve traded the First Trust IPOX-100 Index (FPX) since it was $21 a share. I’ve bought long before the Visa, MasterCard, Twitter, Facebook, and First Solar IPOs… And I’m continuing to buy long before the Ferrari IPO rolls on to the floor…

For those of you unfamiliar, this in the Index that tracks the U.S. IPOX-100 index, which includes the 100 largest, typically best-performing and most liquid IPOs in the U.S. It measures the average performance of U.S. IPOs during the first 1,000 trading days.

And as you can see, it’s performed beautifully for years.

With this one, you’ll never have to worry about chasing an oversubscribed, overvalued IPO. In fact, you can own the hottest IPOs out there – all of them – at a low price of just $50 a share these days.

 

 

Chart of the Day: Coke (KO)

Oct 12, 2015

Historically, we’ve done quite well with Coke…

Using nothing more than Bollinger Bands, RSI, MACD, W%R, MFI and candlesticks, we’re able to predict pivots off oversold and overbought conditions up to 85% of the time.  Nowadays, as Coke over-extends to $42 a share, our technical pivot points are indicating near-term reversal. 

 

Chart of the Day: Teva Pharmaceutical Oversold…

Oct 12, 2015

After falling from $72.50 highs to less than $$60 a share, TEVA has become quite an oversold bargain. Not only is momentum shifting with regards to MACD, MFI and RSI, but the company has a December 2015 catalyst that could send the stock screaming higher with patience.

On December 9, 2015, the company will face FDA panel review for the treatment of inadequately controlled asthma in adults and children. The drug – Reslizumab – reportedly goes after the molecules that cause asthma.

“An injection once a month was given to hard-to-treat asthma patients,” according to reports “Their inflammation went down and they had a 50 percent reduction in severe asthma attacks. ‘It takes some of our severe asthma patients from being really out of control to being well-controlled.’”

“Doctors are hoping this new drug will be available within the next two years. Reslizumab will not work for everyone, but a simple blood test will show who it will help and who it won’t.”

With that catalyst in place, consider buying the TEVA stock as high as $61 and / or buy to open the TEVA January 2016 60 call up to $3.

 

InterOil: The Easiest Money Ever Made

Oct 09, 2015

On September 15, I noted:

It's time to buy IOC again, as our technical pivot points become over-extended. Plus, Goldman Sachs just added the stock to its Conviction Buy list with a PT of $45 a share.  Consider buying the underlying stock up to $38 and / or the IOC December 2015 35 calls at market.

As of today, IOC trades just under $39. The calls last traded around $5.50.  Take the gains.

It shouldn’t be this easy to make money.

 

 

 

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