Four Profitable Trades for THIS WEEK!

Okay - I pretty much NEVER give out secret trades. The reason for this is because my anxious students always put money on the trade, rather than learning to trade first. Of course inevitably a trade slips out and someone does it. I really don't mind because they are usually great trades. Last time I did this Liz made over $14,000 on RIMM for the earnings trade I let slip out (oh yea, that was in 1 day!). Oops! So you can understand why students keep saying "give me another RIMM trade.."

Today, friends, I have heard your cry. And today I will not give you another RIMM trade. Instead I will give you 4 trades that very could make you some serious money THIS WEEK!

1) FSLR

FSLR is slated to release earnings TOMORROW after the close. FSLR, being the stock it is, tends to move far on earnings. Consequently there is a really great earnings trade set up.

First of all everything is set up perfectly for a break. A slight better chance of a bullish break than a bearish break, but with earnings coming up you don't want to risk it. Let's call it neutral.

Secondly FSLR is has a Bollinger Band squeeze play shaping up. There's two good things about this. 1) It indicates an impending move. 2) Volatility is typically a bit lower. given the extreme volatility on FSLR options any discount is a good thing.

The way this trade would set up is tomorrow buy both a CALL AND a PUT. One on each side of the stock. You do this so you can make money if the stock goes up, and you can make money if the stock goes down. It's a win win trade when you know news is coming out. The upside target is $160 minimum, and $180 on the high end. And what happens if they miss? $130 on the downside with $103 being the ultimate downside target.

This trade does have 1 small drawdown. That is the price of the options are still a bit steep. Since you know you will loose most if not all of the value of one of these options the initial investment may not be worth it for you. If you like the trade however but don't want to do it on FSLR - try the same trade on VAR!

2) C

Let's face it - all the financials are a wreck. And most people are running with all their might away from them. However if you have one (like Citi) that the governement has promised it will NOT let fail, and it's trading so cheap you can buy the stock for less than most option purchases... well it's a Covered Call trade made in heaven.

C closed today just under $3.00. Buy 1000 shares for $2.89 and turn right around and write a $3 covered call for $.25. That will bring in almost 10% immediately and you'll be out of the trade in less than 3 weeks. Plus you still own the stock. Next month you can do it again. Worst case? You get called out at $3/share and keep your .25 premium. So you cleared $3.25 on a stock you paid $2.89. That's better than 10%. Not too shabby for financials!

3) AZO

Autozone has traded into an amazing Bollinger Band squeeze with very low volatility. That means as soon as it breaks, it's going to be strong, mighty, and profitable. With earnings coming up at the end of the month I would anticipate a relatively quick break as traders anticipate the earnings announcement. If this stock moves above 167.75, consider buying some June 160 Calls. OR, if it moves below 154.75 consider buying some June 160 Puts. Either one should bring you a solid $10+/share.


4) AAPL

And my favorite strategy on my favorite stock. AAPL should continue it's bullish move on up to about 135-138. However it's doing some resting at the moment. So consider a BULL PUT SPREAD on AAPL by selling the MAY 120 Put and bringing in around $2.50/share. And buying the MAY 115 Put for about $1.20/share. It's an easy 20%+ over the next 3 weeks.


Hope these help. Don't forget our next Foundations class starts TONIGHT at 11:00 EST. We have just a few seats left. See you there.