Follow Chris Johnson Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
If you saw last week's edition of Fast Profits with Money Morning, you know I've been eyeing up the chip sector. Well today, I'm seeing a clear profit signal coming from one chip stock in particular…
With the holidays officially behind us, it's time to start looking toward the year ahead. And as our economy gradually establishes its long-term recovery from 2020's "COVID crash," it's more important than ever to get a feel for which market trends will be standing strong as we step out into the "post-COVID" unknown.
One trend that clearly showed it has the chops to outlive any stock market catastrophe is tech. It's one of the most highly funded, constantly evolving industries, proven by the Nasdaq's routine lead out of the March stock market vacuum. And what are the building blocks of tech; the very driving forces that make each new generation of doodads possible? Semiconductors and microchips, of course.
So now you can see why these stocks have caught my attention as we wade out into the economic wake of two coronavirus vaccines.
But in a market so oversaturated with publicly traded companies, which one is really worth your money?
Well, that's exactly what the question I'll be answering today, and of course I'll be including an options play to leverage a rising tech superstar for even greater gains.
This Chip Stock Is Coming for Huawei's Crown
As Huawei, the previous leader of the telecommunications field, finds itself indefinitely caught in the crossfire of Sino-American trade tensions, carriers around the world are beginning to turn toward one of their contemporaries: Infinera Corp. (NASDAQ: INFN).
Infinera is now a leading manufacturer of semiconductors and fiberoptic technology. In fact, it's currently one of three providers in the world of 800G solutions, a tech feat that could even blow 5G out of the water.
Over the last several months, Infinera's come under some scrutiny from financial analysts, questioning the practicality and profitability of a new cable-based network while the wireless miracle that is 5G gains support across the globe. Hedge fund managers began removing INFN from their portfolios and short sellers swarmed, all attempting to time Infinera's demise.
However, despite cynicism from naysayers, INFN recently turned into a relative strength leader among semiconductor stocks, rallying 65% in about one trading month – all while the majority of the industry was barely treading water. Now, as the stock continues its climb higher, last month's bears are bracing to get squeezed out of their positions, inevitably catapulting INFN upwards of 25%.
So today, I'm helping you cash in on that 25%, or even turn it into 100% gains or more with a call option trade…
Trade details…
Action to Take No. 1: Buy Shares of Infinera Corp. (Nasdaq: INFN) using a limit order of $10.50.
Action to Take No. 2: Buy-to-open INFN July 16, 2021 $10 call (INFN210716C00010000) using a limit order of $2.60.
Sometimes the Biggest Profits Happen Where No One's Looking…
One key takeaway from today's edition of Fast Profits – sometimes, to lock down the biggest paydays, you need to invest against the grain.
If we followed the crowd, joining the short-selling feeding frenzy on Infinera, we could be looking at a huge loss right now. But because we know better than to trade on a rumor, we might just double our money as this tech leader soars.
Right now, another "buy the rumor" trend is catching – folks are piling into Bitcoin en masse, trying desperately to ride the tailwinds of a tremendous 2020 rally. But you don't need to pay upwards of $34,000 a coin to harness the raw profit potential of the block chain market…
In fact, my fellow pro-trader Tom Gentile says he's found a tiny altcoin that could hand you 20x your money in a matter of weeks, at a fraction of Bitcoin's cost.
Tom's already released his record-shattering pick, but don't worry, there's still time to get in – just click here for the details…
Follow Money Morning on Facebook and Twitter.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Straight-Up Profits. He also contributes to Money Morning as the Quant Analysis Specialist.