Three Up, One Down
Today’s four trades give us three ways to profit from higher prices and one from weakness. Three give their theses months to develop; the fourth is a short-term earnings trade.
Growth, Momentum And Weakness
Our first bullish idea comes from Portfolio Armor’s latest Top Names, the stocks our system estimates will have the highest returns over the next six months. The theme is specialty food distribution: a business growing sales while its stock offers a strong technical setup.
Our other bullish ideas give us exposure to Bitcoin and semiconductor equipment. Both passed our Trend & Consolidation screen, which helps us find entries in established uptrends. For Bitcoin, we’re looking for a recovery after a pullback. The semiconductor trade centers on the next earnings report.
The bearish idea comes from our Earnings Downgrades in a Downtrend screen. It targets a company whose deteriorating profitability accompanies a weak chart. That combination gives us a reason to look for further downside alongside our bullish opportunities.
Two Time Horizons
The food-distribution trade spans two expected earnings cycles, while the Bitcoin trade gives a price recovery several months to develop. Our bearish position also extends beyond the next expected report. The semiconductor trade has a tighter objective: a modest rise around earnings. Its calendar structure benefits most if the shares finish near our chosen strike when the short call expires; a large move in either direction can hurt it.
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We priced our options structures using three different models and are using limit prices designed to get us in at a slight discount to fair value.
Paid subscribers will find the names, structures, maximum entry prices and exit plans below.
Today’s Top Names Trade
Theme: Specialty food distribution.
RSI: 50; Chartmill Technical Rating: 10; Setup Rating: 8; Fundamental Rating: 5.
