Sometimes it is like shooting fish in a barrel. It just takes a bit of work finding the right barrel.
In the August 11th, 2014 Seasonal Forecaster, I covered three stocks with good looking ‘barrels'. With General Dynamics (GD), I highlighted the trading range it had formed and the recent strong rebound off the bottom of the range. Stochastics were about to form a crossover ‘buy' signal.
What really stood out to me was GD's seasonal pattern, its track record of good gains through the rest of the year. Picking the 9-week period as a reasonable target, we saw that GD has produced an average 6.3% gain, with gains in an impressive 19 out of 22 years. This suggests strong institutional participation in this stock this time each year.
GD has now not only quickly moved to the top of the trading range, it has broken above.
For readers who like to use options, in the August 11th newsletter I also covered an alternative trade using GD November 110 Calls. Those calls are now up 48%.
This 5.1% gain in 2 weeks works out to 155% annualized, which means if we could finds trades like this over and over, we would do pretty well every year, even focusing on just stock trades.
Well, there are trade setups like this nearly all the time. It's just a matter of finding the right ‘barrels'.
With GD having gained within 2 weeks almost as much as it typically does over 9 weeks, what is the next step for the GD trades? And what are today's ‘barrels'? That is covered in today's newsletter.
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, please click on the following link: www.markettamer.com/seasonal
Copyright (C) 2014 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.
The content on any of Market Tamer websites, products, or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options, and other securities involve risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities are not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options (http://www.optionsclearing.com/publications/risks/riskstoc.pdf). The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.
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