I hope you’re having some much needed time off for Thanksgiving, but for me — it’s business as usual.
Sure, the markets are closed today, but you know the saying, “Money never sleeps.”
I wanted to sneak away from the festivities today and take some time out to show you some catalyst plays to keep an eye on in the coming weeks.
If you know me, you know how I love to trade biotechs — and since these stocks are coming back into favor…
I think they’ll provide opportunities to play the catalyst runup.
December is filled with catalyst events for biotech and pharmaceutical stocks. If you want to check out what companies are set to report data points, BioPharmCatalyst offers an extensive FDA calendar.
Since I know you want to get back to the festivities, I’m going to keep this brief.
Kiniksa Pharmaceuticals (KNSA) has a catalyst date in 4Q 2020, and since it hasn’t happened yet… it may come some time in December.
The company is expected to report data from randomized, double-blind, placebo-controlled investigator-initiated study in the U.S. for its COVID-19 treatment. By the looks of it, it may present this data at the Evercore ISI 3rd Annual HealthCONx on Tuesday.
The stock is already running higher, and it may continue its run into the event.
Odonate (ODT) has a catalyst date on Dec. 11.
The company met its Phase 3 trial primary endpoint back in August. Now, the company is expected to present data at SABCS, which will be held virtually. This data will be for its metastatic breast cancer treatment.
Last, but not least Myovant Sciences (MYOV) has a PDUFA date under priority review on Dec. 20.
With the stock running higher already, this is one to keep on the radar for a breakout.
Listen, anyone can provide you with trade ideas, it’s up to you to develop your own trade plan and have the right strategy in place.
Let me show you one of my best strategies… the same one that helped me get my trading career off the ground.
I’ve seen it happen time and time again.
A stock runs higher and a short seller comes out and makes a statement — calling for a massive drop.
Heck, this happened with Blink Charging Co. (BLNK) on Monday.
Do you know what happened that day?
The stock actually continued its run and closed at $34.67. However, the stock did close 16.36% on Tuesday. With a stock like BLNK, the company didn’t refute the claims nor did an analyst come out and defend the stock — I mean, after all, they have bigger fish to fry.
However, when it comes to smaller companies or large companies with a lot of analyst coverage, there is typically a rebuttal. It’s one catalyst I love to take advantage of, whenever I get the chance.
Right now, there are plenty of trades such as the one I’m about to show you. To be quite honest with you, I believe these are some of the easier trades out there.
Not only that but the money-making potential in comparison to the risk make these setups a no-brainer for me.
That said, let me show you what I’m talking about here using a real-money case study.
Listen, I get it… there’s so much action in the market, it’s hard to keep up with all the news events and catalysts out there.
However, once you learn how to uncover them, I genuinely believe it can help you better time your trades.
Let me show you what I mean by that.
On November 19, famed short-seller Kerrisdale Corp. issued a warning on the Tattooed Chef (TTCF).
The research firm published a short report and had a series of six tweets to let its followers know about their thesis.
Of course, when a firm such as Kerrisdale Capital issues a report, the street listens.
The stock cratered and sold off right out of the gate.
Most pros will react to this news and go with the short thesis. If you look at the chart above, those who were late to the party could’ve shorted the lows and actually lost money in it.
You see, generally, when a stock gets attacked by a short-seller, it comes out with a rebuttal, refuting the claims.
I believe we were set for a bounce.
The next day I sent this alert:
On Tuesday, I closed the trade out for a winner…
My timing was a little off on the trade, but I didn’t really sit in large losses. It was a relatively easy trade for me.
Right now, there are low-hanging fruit trades such as the one I just showed you.
The key is to identify the catalyst, plan the trade, and trade the plan. At least that’s what I do.
I want to show you how to use catalysts to your advantage and teach you how to develop a unique edge in the market.
With the way the market has been acting, I think you should attend this training session because it can potentially make you a better trader.
Have you ever noticed a stock explode higher…
Then you pull up its competitor or peer, and notice it’s up as well?
I mean right now, we’re seeing this price action almost every day — and it makes sense. You see, when elite traders see a stock go up on news…
They automatically think, “I missed out, but what other stocks can I get into that are within the group?”
I mean you’ve probably seen them in EV and MJ stocks recently.
Today, I want to show you why it’s important to understand what sympathy plays are and how to uncover them on your own.
A sympathy play is one in which an indirect catalyst affects a stock. For example, we’ve seen how cannabis stocks took off after it was announced the POTUS will begin the transition process to Biden.
We’ve seen work from home stocks get smacked down after vaccine news hit the wire.
Makes sense so far?
So the key to identifying these plays is to identify a leader or peers in the group.
There are tools to screen for these plays, and Finviz is one that’s free to use to identify these plays. Let me show you how to actually uncover these plays.
Take a look at the run in Bitcoin recently.
Now, there are stocks that actually have exposure to Bitcoin. So these stocks actually move in sympathy with Bitcoin. In other words, if BTCUSD prices run higher, chances are these Bitcoin- and blockchain-related stocks follow suit.
So let me show you how a sympathy play works with a real-money trade I took.
On Monday at 10:07 AM ET, I sent this out to Fast 5 Trades subscribers.
This week’s trade is RIOT.
It’s a shortened Thanksgiving week, which usually means there is a trend for the week and some outsized moves in small cap land.
This year it looks to be blockchain/crypto to start the week and RIOT is right in the middle of that space.
Buy Zone: Under $7.20
Profit Zone: Upper $7’s to start
Stop Zone: Lower $6.00’s
My Action: I bought 2k RIOT at 7.04.
I was able to get in at $7.04, and the stock closed at $7.23. With this trade, I wasn’t looking to be in for too long, nor was I looking to hit a home run. The way these small-cap stocks move, it’s important to remain nimble, in my opinion.
That said, on Tuesday in the pre-market…
I actually used the gap up to lock in my profits.*
Here’s what subscribers saw in their inbox at 7:15 AM ET.
The bitcoin/blockchain stocks are moving higher again this morning as bitcoin surges higher!
RIOT is up at $7.50 and I sold my shares for a nice win.
Now, there are plenty of sympathy plays in this market, and if you can spot them, you’ll be able to uncover underlying trends in the market.
I get it, in this environment, it’s hard to pick up on what’s moving next.
You’ll learn all about how I time the market to near perfection… and uncover “hidden” bull markets.
Given the way the market has been acting, I urge you to attend this because I believe this session can truly make you a better trader right now.