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...
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...
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.