Some stocks routinely rise and fall during the same time every year. Spotting these seasonal trends can make traders a fortune.
Money Morning Quantitative Specialist Chris Johnson has uncovered a stock that gets a lift every year around the holiday shopping season. It's a stock you might not expect, but we've got the chart to prove it. And by using a little options trading basics, you can lock in a triple-digit gain from the trend.
Plus, it's getting an added boost from the overall bullish trend in the market. All three major indexes - the Dow Jones, the S&P 500, and the Nasdaq - moved into record territory this week. And in the process, they broke through technical levels on the charts that made analysts and traders alike rejoice.
But the real story is the continued strength in the economy, even with recent softness, led by the consumer.
That's a huge benefit to the retail sector, just as the biggest shopping season of the year arrives. While other traders hop into overpriced retail stocks and e-commerce plays, Chris found the unsung hero of the season.
The transport industry, and trucking in particular, is going to see the biggest boost this season. Not only does it traditionally gain strength this time of year, but the strong economy and confident consumers are going to put even more gas in the tanks.
From a trading perspective, transports fly under the radar. They aren't hawking the latest tech breakthrough or driving TV coverage. But this lack of focus means that the market does not realize the fundamental power these stocks now command. That's good for you. There are some mouthwatering options trades that won't cost you an arm and a leg.
And Chris has honed in on one trucking company in particular for his options trading strategy.
Once you see this chart, you'll see why this is such a big opportunity. We'll show you the exact call option to buy too...
The Best Options Trade to Make This Season
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]Using his proprietary "Best in Breed" system, Chris found one stock that stands above the rest in trucker JB Hunt Transport Services Inc. (NASDAQ: JBHT).
In its last earnings report, JBHT missed analyst earnings estimates, although it topped revenue estimates. Interestingly, the stock rallied that day.
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This is a good marker for stocks with hidden strength. When a stock rallies on bad (or mixed) news, it tells us there is strong underlying demand for shares that Wall Street may be missing.
Doing a little further digging, Chris found that sentiment indicators are tipped to the bearish side. Short interest is high. And Wall Street analysts are decidedly bearish on the stock.
With all these people betting against the stock, we are on to something when it keeps rallying. And the worse the bearish sentiment indicators get, the more bullish the stock becomes.
After all, if "everyone" is bearish and has sold, who is left to sell more shares? Selling pressure dries up, and the smallest of sparks can get the bulls stampeding higher, and quickly.
That's why JB Hunt's seasonal strength is about to bury the bears.
Chris says the stock has beaten the S&P 500 75% of the time during this time of year, and it beats the S&P 500 by 4.5% to 5% when it does.
You can see its seasonal strength in the chart below...
While you can buy the stock outright and make a nice gain over the next few weeks, you can really juice up your returns with an options trade.
Here's how to do it.
Buy to open the JBHT Feb. 21, 2020 $115 calls (JBHT20200221C00115000) for a price of $9.60 or less. They closed Tuesday at $8.80, so the opportunity is ready for the taking. Target a 100% profit before the option expires. Use a stop-limit of $8 for protection, lower if you can buy under $9.
This Historic 20-Trade Winning Streak Is Unstoppable
With his brand-new Infrared Index, Chris Johnson is able to identify specific trigger points that tell him where a stock is anticipated to be headed over the next 24 hours.
The result? A winning streak others could only dream of... We're talking 20 consecutive winning trades, totaling 950% in gains!
Now, he has a new trade recommendation coming out tonight - so if you want in, you better strike now.