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Restoration Hardware (RH): Screaming Off the Lows…

Sep 11, 2015

On September 2, I noted, “The stock is now setting up to reverse off recent lows at the 200-day moving average. Since late May 2014, the stock has held the same moving average well… and bounced. We’re betting on a similar move now. What makes this trade even better is that MFI, MACD and RSI are on the floor, ready to reverse from oversold conditions at any point.”

We just got that bounce…

The stock now trades $6.40 higher after strong earnings and strong growth prospects.

Even now, the stock remains oversold on MACD and reversing RSI. I’d like to see a test of $105 on the stock near-term.

 

Mastercard (MA): Buy, Buy, Buy…

Sep 10, 2015

I’ve been recommending a buy on MasterCard (MA) for years…

And I strongly believe the latest pullback on disappointing guidance may be a great buy opportunity here, as MACD tests an historical low of -1.3. The last time it got this low, MA popped from $70 to 87.50 not long after.

I don’t expect the fear or selling pressure to last much longer in the name based on the fact that this is MA. Long-term growth remains solid.

There are two ways to trade this. One, buy the underlying stock up to $92… and / or two, buy to open the MA January 2016 92 call up to $6. It has a current delta of 0.5064.

 

Biotech Stocks: October Catalysts could Send these Higher

Sep 08, 2015

I've always been a fan of trading biotech stocks... 

Typically, I like to buy biotech names five to six months prior to FDA catalyst dates. But these two oversold stocks are just too tough to ignore just weeks from approval.

The BioDelivery (BDSI) drug – Belbuca, a treatment to reduce the severity of chronic pain issues -- is up for potential FDA approval by October 23, 2015. If we hear good news from the government agency, the stock could take off very nicely. At $6.66, the stock is massively oversold. I’m opting to just buy the stock here. Consider buying BDSI up to $7.

 

Spectrum’s (SPPI) drug EVOMELA for the treatment of multiple myeloma goes before the FDA for potential approval on October 23, as well. This is another one that’s a bit oversold. I have a near-term price target of $9 on the stock. Consider buying just the SPPI stock up to $7, as well.

 

 

ACADIA Pharmaceuticals (ACAD): Immediate Buy Opportunity

Sep 08, 2015

ACADIA Pharmaceuticals (ACAD) just filed its New Drug Application for its Parkinson’s disease Psychosis (PDP) drug.

According to the National Parkinson Foundation, between four and six million people worldwide suffer from Parkinson’s disease. About 40% suffer from PDP, characterized by hallucinations and delusions.

At the moment, there are no other FDA-approved therapies being used to treat PDP issues. If ACAD has its drug approved, it could provide significant profit opportunity. ACAD has also requested Priority Review of NDA, which if granted would accelerate the review from ten months to just six months.

I believe it’ll move significantly higher. It’s a buy at market.

 

Why I’m Buying China Right Now…

Sep 07, 2015

It wasn’t exactly a tough call…

In fact, it was one of the easiest calls I’ve ever made.

On May 28, 2015, I noted the party in China was over. One way to trade a potential disaster in China was by buying the Pro Shares Short FTSE China 50 (YXI).

At the time, the YXI traded at $23.50. It hit a recent high of $32.15.

 

Not bad…

I also noted the fall wasn’t over. The next stop was 3524, as China’s government rescue plan to prop up stocks fell apart. A deeper crash isn’t too far off, as China runs out of options…

 

Not only did it crash below 3524, it fell well under 3000.

But as fear reaches an epic high, now is actually the perfect time to buy China. Most of the bad news has surfaced. Now the fear has reached an extreme high that contrarians, like me, simply cannot ignore.

The bears have long noted China is on death’s door. But if we look at Chinese H-Shares, as pointed out here, we can see valuations are as low as the Tech Crash and Global Fiasco of 2008.

In short, China is overdue for a bounce here.

 

A great way to trade China here is by buying the Direxion Daily China Bull 3x Shares (YINN) at market, as well as the iShares MSCI China Index Fund (MCHI) at market and the iShares FTSE China 25 Index Fund (FXI).

 

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