Trade Alert: Four Bullish Trades

Looks like the bull market's back. Let's try to make some money.

Looks Like The Bull Market’s Back (For Now)

During a market pullback last month, I placed two bullish trades, one on Coinbase (COIN 0.00%↑), which ended up being a 100% loss, and one on Travelzoo (TZOO 0.00%↑). I opened a GTC (Good ‘Till Canceled) order on half of the TZOO options to exit them when they were up 200%, and that trade just filled yesterday. I’m holding out for a bigger gain on the other half of that trade.

@dpinsen @dpinsen ♬ Black Sheep - Metric

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That small caps like TZOO have been ripping to the upside is one indication that the bull market is back for now. While it is, let’s try to make some more money.

Four Bullish Bets

You might think that with the recent market rally it would be easier to find stocks to bet against than bet on, but that hasn’t been the case. I did post one short trade on Friday, which filled for me on Monday,

But other names that come up on the same bearish screen look less attractive when I dig into them (e.g., they reported earnings this month and beat estimates). I do have four interesting long ideas today though:

1. A Portfolio Armor Top Name that has an overall valuation rating of 7 (on a scale of 0-to-10, with 10 being the best) and a Piotroski F-Score of 8 (on a scale of 0-to-9), according to Chartmill data. Valuations of 7 are fairly rare among PA top names. I’m buying the underlying shares here, as part of our core strategy (our core strategy is to buy equal dollar amounts of Portfolio Armor’s top ten names, but trailing stops of 10% to 20% on them, and replace them with current Portfolio Armor top ten names when we get stopped out). My guess is that we’ll be less likely to be stopped out of a top name with a higher valuation rating during the next market scare.

2. Another current Portfolio Armor top name that’s been on a tear. This one has an overall technical rating of 10 via Chartmill, and a set-up rating of 7, indicating that this could be a good time for an entry. With this one, I’m going to do something a little different and just bet on it trading higher a month from now, rather than holding it through its next earnings release. Given its valuation, I feel more comfortable placing a shorter-term trade here.

3. The third stock is one I set a “666” alert on a couple of months ago, and it just popped up on that screen, which looks for names with an overall technical rating, set-up rating, and valuation rating of 6 or better. This one has an overall technical rating of 8, a set-up rating of 6, and a valuation rating of 7. It reported earnings this month, and beat on both top and bottom lines. For this one, I’m placing an options trade on it going out past next quarter’s earnings.

4. The fourth stock came up on the same screen that gave us PDD Holdings (PDD 0.00%↑) last month. Both of our PDD trades are currently on track for >200% gains.

Details below, but before we get to them, a reminder: If you’re concerned about the next market downturn, you can download our optimal hedging app here, or by aiming your iPhone camera at the QR code below.

Bullish Trade #1