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Big surprises often lead to big moves. This is why one of my favorite screens to run on MarketSmith is for stocks that beat earnings estimates by more than 50% and receive favorable market reaction. Here’s my version of it:
The current list is quite short and involves stocks that have weathered the market correction quite well: SEND,
Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.
All charts in this post are powered by MarketSmith
The market is still in a correction mode but plenty of stocks have had a good year. As of December 15, there are 62 that have more than doubled. If you study their charts, you will notice how the majority of them started their move with a huge-volume breakout to new 50-day highs.
We see quite a few enterprise software names on the list, which only comes to remind us to always pay attention to industry relative strength. It is a lot more sustainable catalyst than just company’s earnings: TWLO, TTD, OKTA, MDB, AYX, COUP. Most of these names continue to be among the strongest stocks currently in the market and are likely to outperform if the general market bounces.
There are also a few cannabis related stocks, which was one of the hottest industries in 2018: TLRY, NBEV.
As usual, the list is dominated by biotech, healthcare and medical research names which account for almost half of the big 2018 winners.
There are a couple turnaround stories in the retail space – CROX and FOSL. There were a lot cannabis-related earlier in the year, but the correction in the last two months has caused a lot of damage to the sector.
While the S&P 500 is down 11.2% from its 52-week highs, the 2018 Doubles are down on average 24.3% from their 52-week highs. Most of them offer multiple great long trading opportunities during their ascent. Now, quite a few of them are setting up on the short side. Some examples to consider: WWE, REGI, SSTI, AMRN,
Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.
It’s not a secret that many enter the options world because they are undercapitalized and want to get rich quickly. No one wants to get rich slowly by averaging 8% a year. The only way to get rich by making 8% a year is if you are already rich.
Options trading can be very challenging. Developing traders are attracted by the leverage options offer, and professionals love the ability to manage risk in a more precise way. Options are not the magic solution to any problem under the sun. They will magnify your trading weaknesses. If you are a lousy, impatient trader, options will help you lose your money quicker. If you know how to pick stocks, size your positions properly, and time your market exposure, options can help you boost your returns significantly.
In this book, you will learn:
This is an easy-to-read and easy-to-understand guide filled with practical examples, market wisdom, and hundreds of annotated stocks and options charts. There are no complicated and sophisticated options strategies. Everything is as simple as possible. I hope you will enjoy it and find it extremely useful and maybe, even eye-opening.
If you read and liked one of my previous books, you will absolutely enjoy this one. With that in mind, I like to keep expectations reasonable:
If you expect complex multi-leg non-directional options strategies and a magic recipe, this book is not for you. Don’t waste your money. More importantly, don’t waste your time.
But if you want to learn how to consistently pick stocks with great upside or downside potential, how to express your bullishness or bearishness via simple call or put options, what type of options to buy – what duration, what strike, when to buy them and when to sell them, how to manage risk and achieve superior returns, then this practical guidance might be what you have been looking for.
Every time I write a book, I always promise myself that it will be the last one. It takes so much time and effort, but then I realize how much I actually learn while sharing my thoughts and experience in an easy-to-absorb manner.
As always, I benefited tremendously from the whole process of writing this options book – the research, the charting, the thinking, the reviewing of my options trades and journal have been an invaluable experience. I am a better and more profitable market speculator because of it. I am confident it can help your trading process and returns, too.
TABLE OF CONTENTS
What You Can Learn in This Book.
One – The Power of Options – Pros and Cons.
Two – How to Follow Big Trends with Call Options.
Three – Swing Trading with Call Options.
Four – How to Trade Downtrends with Put Options.
Summary