In my May 3rd newsletter, I focused on Polaris Industries, a maker of ‘big-boy' (and girl) toys, like 4-wheel ATV's. It is a good quality stock and had a strong upward seasonal tendency earlier this year when I first covered trade possibilities. Over the prior two months, PII had been cycling within a well-defined trading range and offered additional trade possibilities.
I analyzed a delayed covered call trade that could return 4.1% over 14 days and a long diagonal trade targeting a quick 10% profit within a few days.
Stock-only traders could also play the game. PII is now up 5.5% in the 10 trading days since May 3rd, and they are smiling. Someone implementing the ‘delayed covered call' trade I covered is likely to lose the stock after today's close, as it is in-the-money. This is a stock worth keeping. I would roll-up-and-out to at June 92.5's to keep this trade going and capture additional profit.
The long diagonal trade I analyzed, a ‘Sell PII May 87.5 Calls, Buy PII June 80 Calls' trade, if entered just after the open on 5/3/2013, hit the suggested 10% profit target on May 7th, just 3 days into the trade. I expect many more profitable short-term trades from PII in the future, and will continue using seasonal patterns to find ideal entry points.
In today's Seasonal Forecaster I cover a bearish-trade setup on another stock. The similar bear put spread trade on Apple in Wednesday's newsletter hit the 20% profit target later that day. We're hoping for similar success with today's trade candidate.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, type in www.markettamer.com/seasonal-forecaster
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2013 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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