As we kick off the first week of June — I believe there’s going to be a lot of action and plenty of money-making opportunities for me to take advantage of out there.
After my performance during the first few months of 2020…
Many readers have started to realize the importance of catalyst events… and one question I want to address is today is, “Why are catalysts important?”
For me personally, I believe it’s one of the main factors that cause stocks to move. Today, I want to reveal to you my trading process and why uncovering catalysts is so effective for me.
The Importance Of Catalysts
When it comes to stocks, I’m a firm believer that there’s one main factor that moves them — catalyst events.
Now, to me, catalysts are any piece of information that can cause a stock to pop… or drop. Catalysts can be: earnings releases, news events, data releases, corporate action, “insider” activity, “smart money” activity, etc.
The key to my success, in my opinion, is my ability to spot these catalysts ahead of time… and plan my trades accordingly.
One of the major catalysts I’m looking at is the race for a vaccine and treatment for COVID-19. This has caused healthcare companies to pile into this area and conduct research and development.
It’s one I’ll be focused on for quite some time.
With so many potential healthcare companies moving into this area… it’s often hard for beginner traders to pick the needle from the haystack.
You see, when it comes to the biotech and pharmaceutical sector, it’s not wise to just buy a bunch of these stocks and hope they can come up with a solution — in my opinion.
My Approach For Uncovering COVID-19 Plays
So what’s my approach for identifying these stocks?
When I’m trying to look for COVID-19 stocks, I try my best to look at as much information as possible and try to identify catalysts.
That means analyzing the company itself, news releases, and any other catalysts that could move the stock
For example, one stock on my radar right now is a $2 healthcare stock that recently got authorization for its COVID-19 clinical trial.
That’s one catalyst that could send the stock higher. Not only that…
But I’ve noticed the company’s CEO has been purchasing shares in the company… and he’s done it nearly 20 times over the past few months.
I don’t know about you, but when someone as close to the company as the CEO is buying, it tells me there’s something in the works.
That’s another catalyst right there.
Additionally, I noticed some unusual call option activity the other day in the name… and it saw a 204% increase in call volume.
With so many catalysts in the works in this stock… I wouldn’t be surprised if it breaks out and runs to all-time highs (north of $15).
When it comes to catalysts, I believe they’re extremely important because it allows me to identify trading opportunities poised for large moves.
For example, the one COVID-19 stock on my radar now, in my opinion, has 10X potential… and it’s one of my highest-conviction trade ideas right now.
If you want to learn more about this COVID-19 trading opportunity, then click here to gain access to Sniper Report.