Goodbye Summer, Hello Profits
#1 Market Vectors Gold Miners ETF (GDX)
| Recommended by: Sam Collins, Editor, Daily Trader’s Alert.
The Market Vectors Gold Miners ETF (NYSE: GDX) seeks to replicate the price and yield performance of the Amex Gold Miners Index. About 80% of its total assets are in the common stocks of companies in the gold mining industry. Gold has been a strong performer for almost all of 2010, and it broke to new highs again this month. With the metal near $1,300 an ounce, gold mining companies are returning big gains and dividends. On Sept. 22, GDX broke through the top of a resistance line at $55 with a target of $64. Buy the GDX Dec 56 Calls. (For more gold trades, see 2 Gold Stocks That Will Double By 2011.) |
![]() Top 5 Stocks for the Fourth- Quarter Surge |
#2 McDonald’s (MCD)
| Recommended by: Chris Johnson and Jon Lewis, Editors, The Winning Edge.
While other fast-food chains struggle to find the right menu combinations and price points to attract customers who are watching their waistlines and their wallets, McDonald’s Corporation (NYSE: MCD) keeps plugging along. And overseas sales have contributed to the bottom line to a greater extent than its rivals. The stock has reflected this success, albeit in an unspectacular fashion. The shares are up 20% this year and have been on a solid run higher for nearly three months. The current rally has proceeded along the 20-day moving average, a trendline the stock hasn’t closed below since late July. Furthermore, MCD’s chart shows the shares usually doing well throughout the fall, although Decembers have been weaker. To ensure that you capture the bulk of the move, play the MCD Dec 75 Calls. |
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#3 Sears (SHLD)
| Recommended by: Michael Shulman, Editor, Short-Side Trader.
I hate Sears Holdings Corporation (NASDAQ: SHLD) — I hate the stores and I hate the stock. SHLD is a cult stock that has been held up by air and the reputation of Eddie Lampert, the company’s chairman. The company has seen nothing but decline and decay for too many quarters to count. Our ChangeWave Research surveys show yet another pullback in consumer spending on the horizon, and middle-tier retailers are going to continue to get squeezed. That being said, the stock is subject to savage short squeezes and is very hard to hold as a short-term position. The short interest is more than 22% of the float with 37 days to cover! However, it could make a great long-term short with the SHLD January 2012 puts. |
![]() Top 5 Stocks for the Fourth- Quarter Surge |
#4 International Business Machines (IBM)
| Recommended by: Sam Collins, Editor, Daily Trader’s Alert.
International Business Machines Corp. (NYSE: IBM), the bluest of the information technology blue chips, is expected to increase revenues 5% this year and another 5% in 2011. S&P estimates that IBM had an order backlog of $129 billion at the end of June, and is flush with cash, which it can use for acquisitions. Earnings are estimated at $11.50 for 2010 and $12.60 for 2011. S&P has a fundamental 12-month target of $161 for the stock. Technically, the stock broke from a compound top in mid-September at $132 with a target of $150 within three months. Buy the IBM Jan 135 Calls. |
![]() Top 5 Stocks for the Fourth- Quarter Surge |
#5 AutoZone, Inc. (AZO)
| Recommended by: Chris Johnson and Jon Lewis, Editors, The Winning Edge.
AutoZone, Inc. (NYSE: AZO) reported earnings this week, beating on both the top and bottom lines. The stock has been a monster, gaining more than 40% so far this year and 65% from the low in November 2009. What’s even more impressive is that AZO has gone up in almost a straight line this year, with very few pullbacks that were always well contained by the 20-day and 50-day moving averages. And the stock is not technically overbought, despite warnings from some analysts that the stock is due for a rest. Stocks typically fall when sentiment is over-the-top bullish, a sign that buying power is exhausted. But with high short interest and just one-third of covering analysts rating the stock a “buy,” we’re seeing a whole lot more room for optimism to drive the stock price even higher. Jump aboard with the AZO Dec 230 Calls. |
#6 SPDR Gold Trust (GLD)
| Recommended by: Michael Shulman, Editor, Short-Side Trader.
Trading is now being driven by hopes, prayers and fears about future Fed action. Inevitably the Fed is going to say, “Whoops, the recovery is really a double-dip recession, and even if we have low growth, it’s time to ease some more.” Translation: Quantitative easing (or what is now being called “QE2”), i.e., the Fed is going to print money, a feat it accomplishes through the purchase of Treasury bills. While the U.S. dollar will take a hit in the short term, in the long run, this won’t have much impact on the greenback because Europe and Japan are in worse shape than the United States. The one “currency” that will rise is gold, the supposed safe haven. Gold has been making new highs, and I think it will pause around $1,300 an ounce, and then continue its climb with QE2. The way to play this is with the gold ETF, the SPDR Gold Trust (NYSE: GLD). GLD calls are liquid and reasonably priced. Top 5 Stocks for the Fourth- Quarter Surge — Louis Navellier details five stocks set to deliver record earnings this October, and jump 30%-50% in the next 90 days as the big money piles in. Get their names online here, including Louis’ buy-below and target prices. |
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