9am EST Trading, at it's core is relatively simple. You buy stocks that are oversold and sell stocks that are overbought. Here are a couple stocks to review.
Have a look at my post from April 8th. I recommended buying Dreamworks (DWA) in the post. The trade was simple. Keep a stop below the recent low. Look for $3-5 of upside. DWA reported earnings yesterday and the stock is now off to the races. I am going to take off half of my position here and raise my stop to my original purchase price. This way I am guaranteed to make some money on the trade without limiting all of my upside. I will be watching the trade carefully so I can maximize my profits, but half is coming off today. That was just easy money.
Here is another easy trade for today. Rent a Center (RCII). They beat analyst estimates and raised earnings guidance yet the stock got clobbered on massive volume. The last time this stock had a selloff like it had yesterday, the stock did nothing but go up 23% in the next 5 trading days. It proceeded to give an investor an 87% in less than 6 months. If you missed the first five day run up, you still had a 46% return, but that is a lot less than 87%.
The trade for today is simple. The stock closed at $18.38. Buy with a stop at around $16.75. This gives you a little less than $2 of downside and my initial profit target is going to be around $23, or $4-5 if upside. The risk reward here is excellent, and I think it can run up very quickly.
As with any trade, know your plan to get out before you get in. And until next time, stay low risk..
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