Trade Alert: Top Names + China

Bullish options trades on two of our top ten names.

Our Top Ten Names From Friday

Since I started this Substack back in December of 2022, our system’s top ten names have returned 18.88% over the next six months, versus 12% for the SPDR S&P 500 Trust (SPY 0.00%↑). That’s why we’ve been using them as a source of trade ideas.

In this market, it helps to look at other metrics too though, so I checked the fundamental and technical ratings of Portfolio Armor’s top ten names as of Friday’s close via Chartmill. The two with the strongest fundamental and technical ratings happened to have something else in common: they were both Chinese stocks that trade here as American Depository Shares. That shouldn’t be surprising: Chinese stocks have been undervalued relative to American stocks for years, and the Chinese government has announced plans to expand its fiscal deficit this year to stimulate its economy.

The Two Chinese Stocks In Our Top Ten

Here’s a bit more detail on the two Chinese stocks that hit our top ten on Friday:

Stock #1

• Travel industry

• Chartmill fundamental rating: 7 (out of 10)

• Technical rating: 9

• Set-up rating: 6

• Piotroski F-Score: 8 (out of 9)

Stock #2

• Education industry

• Chartmill fundamental rating: 6

• Technical rating: 7

• Set-up rating: 7

• Piotroski F-Score: 6

For stock #1, we have a trade with a maximum upside of about 200% within the next month or so; for stock #2, our maximum upside is uncapped. In both cases, our maximum downside is a 100% loss.

Details below.

Today’s Trade #1