You don't have to be Warren Buffett to know this isn't exactly a take-it-easy, fire-and-forget market; it'd be an expensive mistake to let your guard down right now.
Don't be lulled into thinking the bulls are going to enjoy the run of the place.
I'm watching the VIX right now, and something counterintuitive is going on. The volatility index is below 16 and currently headed lower. And if the market can hold above its 50-day moving average (MA50), it should fall below 15, 14, 13, and maybe even 12.
And that's the counterintuitive thing: Usually, a VIX moving lower means stocks will keep moving higher, right? Not always.
See, big traders have been offloading their hedging positions - the trades that protect their positions or pay off when their other bets move against them. Those big trades have actually been what's saving the market from a sell-off.
This sell-off isn't happening today. Or tomorrow. But it is probably coming sometime in the next few weeks.
And so, while there's never really a bad time for low risk with high payoff potential, right now is a particularly great time for what I've got in mind:
That's four stocks, and three ways to trade them for what I think are triple-digit profit setups...
Low-Risk, High-Payoff Stocks to Watch This Week
I love making money. I love railroad stocks. I love this chart here. And I love CSX Corp. (NASDAQ: CSX).
Coal is a huge driver of this bullish action right now. Demand for coal is reaching a fever pitch at the moment, and who carries that coal from A to B? CSX, that's who. I think, in the neighborhood of $34, this stock is woefully underpriced, and this puppy is making a run at $40. Grab the stock, by all means, but the real payoff will come from picking up CSX Jan. 21 2022 $35 calls.
Kroger Co. (NYSE: KR) is down nearly $8 from its September 52-week high. KR shares rallied strongly on Monday, outperforming the broader markets comfortably, only to fall back down 1.7% as of midday yesterday. Now, if you've been following along with my Money Morning Live streams, you'll know I've been bullish on Kroger for a while now. I think it's oversold, and the relative strength index (RSI) reading of 36 and change goes a long way toward backing that up.
Buy Kroger today, and you're getting a $40-plus stock for $38. That'd be good enough, but there's some serious profit potential in the KR Nov. 19, 2021 $39 calls. You can pick these up for around $0.84 right now, and I think they'll double over the next month, making this the cheapest money-doubler on my short list today.
FuelCell Energy Inc. (NASDAQ: FCEL) is in the hydrogen business, and that sector's been going all-out lately. Investors are starting to come around to the fact that bigger businesses from sectors all across the market will be coming, hat in hand, to hydrogen/fuel cell manufacturers when the time comes to decarbonize. I know Boeing and Airbus have been mentioned as candidate customers. I'm very bullish on the sector, and particularly bullish on this stock. Last Wednesday, I recommended my Profit Revolution subscribers look at FCEL calls for $0.39, or less than 40 bucks per contract.
On Friday, I gave my sell recommendation for half that call position for $0.55, or a two-day profit of 41%.
It gets better, though. On Monday, readers were able to sell more of that position for $1.15! That's just about 200% in profits in less than a week on a $0.39 option. FCEL stock is trading for less than $9 right now - I love the price.
And this stock showed up on my scanner the other day. I spotted a huge Draftkings Inc. (NASDAQ: DKNG) trade.
On the surface, this trade looks bearish, but because of the stock position, it's actually a hedge - a "stealth bull" trade. This is definitely a trade to piggyback on right now, but there's a better way to do it than just recreating the complicated collar hinted at here.
Instead, I'm looking at a simple, $3 long call trade: The DKNG Dec. 17, 2021 $50 calls will double with a few points' gain in DKNG shares. And I do think that gain is coming; I frankly can't believe DraftKings is a $49 stock right now. This company has a fantastic position in a white-hot market - and a great business model to boot. DKNG could easily go 20% higher from here.
I'm constantly researching recommendations just like this for my Profit Revolution readers. I'm looking to target moves with the potential to go up 1,000% in 30 days or less... but that cost $100 or less, tops. I drop trade ideas like this live in my Trading Room, every day the markets are open. You can learn more about this right here...
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