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Chris Johnson's been watching the homebuilder sector for weeks, waiting for another profit play to emerge… and today he's pinpointed a prime Fast Profits opportunity in this market.
Due to record-low interest rates, and rising demand amid country-wide stay at home orders, home improvement stocks are likely to be a strong source of market activity over the summer months. But today, we're not focusing on construction giants, now overcrowded with traders.
Today, we'll be looking a niche, under-the-radar home improvement stock, with a few "horses under the hood" to help drive share value higher over the next few months.
On this week's "Fast Profits with Money Morning," Chris Johnson's engineered a trade on a leading manufacturer of outdoor decking materials.
While most Americans are likely to be spending their summer months in the safety of their own abodes, even after stay-at-home orders are officially lifted, we're expecting a large number of homes to be sporting new outdoor entertainment areas, a huge source of business for today's stock to trade.
But today's trade recommendation isn't all speculation of hopeful trends – it just wouldn't be a Chris Johnson-approved trade without some strong technical indicators backing it up. And this stock's got "technicals" in spades…
In fact, this decking aficionado's approaching what technical traders call a "golden cross."
Basically, we're talking about a combination of moving averages, signaling a long-term bullish trend. This stock may have already climbed over 70% since early April, but it certainly won't be stopping here.
All of the recent bullish activity has also attracted some short-sellers, assuming this rally will correct itself. So we're likely to see this stock fall a bit before continuing its trek higher.
But because long-term technicals are suggesting a profitable summer beyond the near-sighted dip, this uptick in selling volume will likely only drive this stock higher as short-sellers are forced to buy back losing positions.
But don't let all of the investing jargon scare you, getting in on this trade is as simple as following Chris's instructions below…
How to Take Advantage of the "Technicals"
Action to take No. 1: Buy shares of TREX using a limit order of $120 or lower
Action to take No. 2: Buy TREX Nov. 20, 2020 $130 call (TREX201120C00130000) using a limit order of $14.
One key takeaway from today's issue of Fast Profits: the most profitable way to trade stocks is to take sentiment out of the equation.
Sure, any emerging trend could make sense as a profitable opportunity. But any professional trader will tell you no opportunity is worth your money until you can back it up technical indicators.
In fact, another pro-trading authority Tom Gentile says the key to generating wealth in any market – real, sustainable wealth – can be boiled down to a single three-part stock pattern.
It relies on three market signals, each serving as a reason to buy in itself… but when they line up just right, a windfall is sure to follow.
Tom's readers have already put this hack to the test, raking in one winner after another, even during some of the worst stock market turmoil of the last 80 years.
One of Tom's readers claims to have nearly DOUBLED their money in 38 minutes using this technique.
And now, you can take part in trades like this too, just click here to see how…