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I have a robust list of open trades in my Trader’s Advantage portfolio, and I want to give you a recommendation in Nautilus to act on right now, plus a look at a sector and some names that I expect to rise going forward.
Nautilus (NLS) is a fitness technology company that designs and makes cardio and strength machines for consumers in the United States and overseas. It offers specialized treadmills, ellipticals and bike products under the Nautilus brand; stair-climbers under the TreadClimber and Max Trainer brands; PowerRod and Revolution home gyms, and SelectTech dumbbells under the Bowflex brand; and more. In addition, it licenses its brand and intellectual property to other companies. It wholesales to gyms and sells directly to the public via TV advertising and the Internet.
Nautilus shares have carved out a massive “cup with handle” pattern over the past decade that will not be complete, or “validated,” until it has cleared the $22.50 area. Even if Nautilus it only gets to that level, it would be a good trade.
Nautilus shares fell 3.7% Monday on no news, offering traders a phenomenal entry point. The stock is very oversold now and should bounce at minimum.
Buy Nautilus shares at current levels. Then, set up to sell the position at my target of $20.05, and set a stop loss at $17.75, good after 10:30 a.m. ET only.
As I look ahead to potential new trades, there is a gentle, but sizeable, rebound taking shape in health care stocks large and small, from Merck & Co., Inc. (NYSE:MRK) and Bristol-Myers Squibb Co (NYSE:BMY) to Biogen Inc (NASDAQ:BIIB) and Amgen, Inc. (NASDAQ:AMGN) in the biotech space, and Medtronic PLC (NYSE:MDT), Zimmer Biomet Holdings Inc (NYSE:ZBH) and Stryker Corporation (NYSE:SYK) in the medical-devices space.
Most of these stocks are so oversold that they could really enjoy an outstanding April if today’s action is complemented with follow-through on Tuesday. I plan to recommend many of these to my Trader’s Advantage subscribers, but want to see the opening action first. Here are some stocks to be thinking about in the meantime:
Merck broke three weeks of resistance on Friday and today, as you can see in the lower chart with daily bars. Now look at the seven-year chart with monthly bars (top) to see where that fits in. Many of its Dow Jones Industrial Average peers, like 3M Co (NYSE:MMM) and McDonald’s Corporation (NYSE:MCD), have already hit new secular highs. Don’t be surprised if bulls circle back for Merck and its compatriots in Big Pharma despite the looming existential risks under either Democratic or GOP presidential regimes.
Now here are a few other charts to study:
Jon Markman writes a daily trading newsletter, Trader’s Advantage, and CounterPoint Options, a service geared towards helping individual traders make steady, consistent profits with the VIX. Follow him on Twitter for his latest take on markets and innovation.