Trade Summary: June 23, 2015

| June 23, 2015

June 23, 2015

 

 Trade Rationale

Stocks have settled down since our last trade and are back doing their sideways dance.  With over half the year completed, it’s beginning to look like we’re in for a relatively flat year overall for equities.  As I’ve said before, it essentially makes it a stock picker’s market.

With that in mind, this week’s theme is going to be based on “stock picker’s” stocks.

Basically, we’re going to be buying calls on three stocks which analysts love, but have been underperforming.  All these stocks have ‘strong buy’ ratings from analysts, but are nevertheless trading below their 50-day moving average.  Let’s get right to it…

First off, let’s grab calls for TravelCenters of America (TA).  TA operates travel centers all over the US highway system.  They’re popular among road trippers and truckers.  With the summer vacation season in full swing, there’s a good chance next quarter’s results are going to be strong.

Sticking to the highway theme, we’re also buying calls on Swift Transportation (SWFT).  Swift is a medium-sized trucking company.  The business has solid fundamentals and should continue improving as the US economy picks up.

Finally, let’s also buy calls on Forestar Group (FOR).  FOR is an intriguing company because of the diversity of its businesses.  It operates as a real estate developer, focusing on residential properties.  Plus, it also has an oil and gas segment focusing on developing oil, gas, and mineral properties. That’s a lot of bang for your investment buck!

Just a reminder, the office is closed next week for Independence Day.  As such, the portfolio update will be published the following week, on Monday.

 

Trade Details

#1) Buy TravelCenters of America (TA) September 18th 15 Calls up to $1.50

For this trade, we’re looking for an up move.  Our first profit point for conservative traders is at $17.  For aggressive traders, you can hold up to $19.  For risk control, the conservative exit level is $13.  $11 is the final exit level for aggressive traders.

TravelCenters of America

#2) Buy Swift Transportation (SWFT) August 21st 24 Calls up to $1.50

With this trade, we’re also looking for a move higher.  Our first exit point for conservative traders is at $26.  For aggressive traders, you can hold to $28.  For risk control, the conservative exit level is $22.  And, $20 is the final exit level for aggressive traders.

Swift Transportation

#3) Buy Forestar Group (FOR) August 21st 15 Calls up to $0.75

Finally, we’re looking for an upward move in FOR.  Our first profit-taking exit point for conservative traders is at $16.  For aggressive traders, you can hold to $18.  For risk control, the conservative exit level is $13.  $12 is the final exit point for aggressive traders.

Forestar Group

 

Category: AOA Trade Summary