Rally for nimble few
The suspense is over and the market has tipped its hand for next couple of weeks. There are opportunities on long side for nimble traders. Possible ways to play it if you are short term trader is to buy in anticipation of earnings. Or buy on pre announcement.
The power of following earnings was evident yesterday in the auto parts group. Upward guidance by BWA lead to nice rallies not only in BWA but in other group stock. The sector looks out of favor and there was virtual scramble to get on board. Some of these stocks have potential to make 25% plus moves in couple of quarters. I am picking up lots of earning anticipation trades in my scan. But you need to be nimble to play them.
Similarly the large cap biotech group is stirring and number of them have started early phase of their possible rallies. That should not surprise most readers as I was anticipating a move in large cap biotech for some time.
Obviously the AMD profit warning has my calls in water currently. But I am adding to that trade. Most of the time companies put out as much bad news as possible in one quarter. So that they can handily beat in next quarter. That is the reason most of the time in large caps buying on bad news works. GLW is another stock I am going to play with options.
Some recent IPO's are attractive buys here. I am finding lots of things to buy not for short trade but also for long term trades. The trick is to find things which have potential but not overextended and have wheels to move further.
The power of following earnings was evident yesterday in the auto parts group. Upward guidance by BWA lead to nice rallies not only in BWA but in other group stock. The sector looks out of favor and there was virtual scramble to get on board. Some of these stocks have potential to make 25% plus moves in couple of quarters. I am picking up lots of earning anticipation trades in my scan. But you need to be nimble to play them.
Similarly the large cap biotech group is stirring and number of them have started early phase of their possible rallies. That should not surprise most readers as I was anticipating a move in large cap biotech for some time.
Obviously the AMD profit warning has my calls in water currently. But I am adding to that trade. Most of the time companies put out as much bad news as possible in one quarter. So that they can handily beat in next quarter. That is the reason most of the time in large caps buying on bad news works. GLW is another stock I am going to play with options.
Some recent IPO's are attractive buys here. I am finding lots of things to buy not for short trade but also for long term trades. The trick is to find things which have potential but not overextended and have wheels to move further.
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8 comments:
HLYS- things which have potential but not overextended and have wheels to move further
AMLN not looking bad
AAPL has pulled back to support - will see if it can rally from down here
HLYS making moves, some volume moving in 11:53am est
AMLN ok, my play in biotech is DNA.
Generally I don't like the stock risk in biotech - 5% stoploss is meaningless when a company can drop 75% in an overnight gap. Going big cap I would have just showed my ignorance of the individual companies. I am long XBI.
Got several tech on my watchlist aside from bio.
I agree, the nimble are making money so far this year.
DNA is large cap , plus profitable, plus catalyst is earnings and it is behind. So till next earning season, it might be safe. But risk always exists, the way to play it is by position sizing or options.
Biotech is best for short term play on catalyst. When I see 10% plus breakout on bitotechs on high volume , I hold my nose and buy. No need to look at earnings or revenue. These things are pure speculation play. Insider buying works very well on biotechs. Look at HTI and MEMY which had recent insider buying and just went balastic. Catalyst is the key.
I disagree with your take on HLYS.
But, time will tell.
Good luck. :)
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