Anyone up for a good four weeks of making big, steady profits?
After a short hiatus in May, buyers are reentering the market in full force, pushing the three big indexes up by single digits for June so far.
And those buyers are coming back because we're entering earnings "pre-season." This event is like catnip for traders who like to go long and who like action.
It's kind of an open secret - known, but not commonly known - that the "pre-season" rallies can be much, much larger than the earnings-report "pop-and-drops" earnings season is known for.
My stock screening software has been working overtime hunting down the biggest opportunities out there right now, and I've hit on eight juicy targets that'll have you rolling in cold cash this summer...
Green Energy Has Some of the Market's Best Plays Right Now
We moved on some tempting targets in the so-called "alternative" or green energy sector over the winter, and things are heating up again quickly far in advance of earnings reporting.
Last week, shares of FuelCell Energy Inc. (NASDAQ: FCEL) recently broke above their 200-day moving average as volume is flowing back into this trade. FuelCell is becoming the canary in the coal mine as companies like Blink Charging Co. (NASDAQ: BLNK), Plug Power Inc. (NASDAQ: PLUG), and Workhorse Group Inc. (NASDAQ: WKHS) (Yes, I said Workhorse!) are finally seeing an increase in trading volume on higher prices.
A lot of this is due to anticipation of a juicy federal infrastructure spend, but increasingly higher inflation - and by that I mean, increasingly higher oil prices - have helped put some wind in these stocks' sails. Be ready for "upside" volatility here as we head into the last few weeks before earnings season.
The Financials Are Shining Again
That inflationary environment has the banks looking really appealing, too. The financials did a great job last quarter and - to a "T" - they followed the well-choreographed "dance" of rallying right up to the earnings announcement and then selling right off - the old "sell the news" shuffle.
And this quarter, the rally's even stronger - regulatory changes and low interest rates have the banks raking it in hand over fist. The Fed greenlit share buyback programs earlier this year based on the health of banks' balance sheets. Ultra-low interest rates are helping the banks with those balance sheets. Banks with active trading desks, in a bullish environment, are like the cherry on top.
But interestingly, my data shows the serious profits are in regional banks right now - smaller banks. I'm talking about PNC Financial Services Group Inc. (NYSE: PNC), Bank OZK (NASDAQ: OZK), and the Bank of Nova Scotia (NYSE: BNS).
This entire segment has outpaced its big brothers, 36% to 29%, because it's where the sweet spot for the financials lies right now. All of these stocks, or the big sector ETF - the SPDR S&P Regional Banking ETF (NYSEArca: KRE) - are going to be deep in the green at least until earnings start in July.
Look, volatility is ramping up, which means profit potential is going to start coming at us left, right, and center. I think stocks are going to move fast, which means one thing: the opportunity to make fast money.
I'm not even talking about three and four weeks - I'm talking about the chance to make bank in mere minutes, multiple times a day, three days per week during Money Hour. My friend and Profit Strategies Podcast co-host, Tom Gentile, is sending out his next Money Hour research recommendations soon - you can click here to learn how to get them.
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 Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.