Follow Stocks to Watch Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
I get a lot of questions – what can I say? It comes with the territory.
Aside from my crypto forecast (bullish – you can see more on that here), one I continually get is whether stocks are "hot or cold." Of course, there are always hot and cold stocks, but what's bullish today could turn bearish tomorrow.
That movement, up or down, is what's really important; if a stock doesn't move, it can be mighty hard to make money trading it.
So, volatility can be good, if you're on the right side of it, and we've got plenty of it right now. And that's where a system like the Money Calendarcomes in – 10 years' worth of hard data on price action across the market's 250 most important stocks and exchange-traded funds.
No matter what the market does, the Money Calendarhits on dozens of opportunities a day in stocks moving up and down.
Here are the ones I think everyone needs to know about this week…
The Trend Is Your Friend
Sir Isaac Newton said it pretty well when he said "an object in motion tends to stay in motion." If you're a trader or investor, what that means is you can usually count on a trend to play out and continue until something big and powerful (or expensive) stops it.
You can use basic technical analysis to figure out whether you should expect a bullish or bearish run to continue. Here's a really easy technique I like to use…
- A break above resistance on increasing volume is bullish.
- A break below support on increasing volume is bearish.
Now, these stocks certainly aren't the biggest, most famous names out there – you won't find Amazon.com Inc. (NASDAQ: AMZN) on this list. And you're probably not going to find these companies in many "Weekly Top 10" or "Biggest Movers" lists out there on MarketWatch or Barron's.
But these stocks have had strong upward movements over the past few sessions, and most are coming off of short-term technical bottoms, meaning the trend is likely to keep going. Here are the stocks the Money Calendar hit on as promising bullish plays…
Gartner Inc. (NYSE: IT) is basically a gigantic consulting firm serving 15,000 organizations in 100 countries worldwide. It offers research, advising, and tools for industries from IT to retail. The shares are up more than 4.5% since mid-week last week.
Sealed Air Corp. (NYSE: SEE) – they're the "Bubble Wrap" people! They manufacture all kinds of packaging, including Bubble Wrap and Cryovac food packaging. If you get anything delivered by mail, there's a pretty good chance Sealed Air made the cushioning. The stock is up 2% or more since the middle of last week.
Leggett & Platt Inc. (NYSE: LEG) is a big, diverse manufacturing company with 145 facilities in 18 countries. It makes mattress frames, casters for beds and chairs, and all kinds of automotive seating. The shares are up around 3.45% since May 12.
Nucor Corp. (NYSE: NUE) – not too hard to figure out why a steel company is having a hot streak, with the economic recovery underway and inflation creeping – more than creeping – in around the edges. It's one of the biggest steel manufacturers and scrap recyclers on this continent. NUE shares have been making pretty impressive moves since May 12; they're up nearly 7% since then.
Kellogg Inc. (NYSE: K) is probably on half the breakfast tables in America, but it makes more than just cereal. Kellogg manufactures all kinds of snacks, like Pringles and Cheez-Its, and the CEO, Steve Cahillane, noted on CNBC last week that the company has noticed a distinct uptrend in snacking, which helped it beat all kinds of estimates in the first quarter. Kellogg shares are up 1.7% since May 13.
Now, all these stocks have made single-digit moves over the past few sessions – that's fine if you own them outright. But you can turn a single-digit move into a double- or even triple-digit windfall with the right kinds of options trading strategy. If you're bullish on these stocks, you'd use call options expiring up to a month out, using strikes one or two steps out of the money.
Now, tracking and predicting the trend is incredibly useful if you're buying or trading stocks, but I've recently found that tracking and predicting "surge events" can pack even more profit potential.
Surge events are relatively recent; they've been happening with greater frequency ever since millions of new day traders and retail investors hit the markets during the pandemic. I've seen these folks put $11 million up for grabs every second of every trading day, because they're just throwing darts in the dark, pouring their money into stocks with pretty much no regard for quality or risk. I've been able to do some backtesting on these surge events, and I've found that the incredible rise in volume and prices has uncovered massive chances for 300% returns in three days… 650% in eight days… even 2,500% in 14 days during the backtesting period. You can learn more about this research right here.
Follow Money Morning on Facebook and Twitter.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.