Trade Alert: A 50% and 300% Gain!

Last week was a busy one for us, and this week is starting off with a bang as well.

Since last Friday, we’ve made two nice gains — of 50% and 300%. Today I’ll quickly recap those, then recommend two trades, so let’s get started…

First, let’s cover the big gain we made.

Last Friday, our orders to exit the last half of United Rentals for a 300% gain were triggered. That means we are officially out of the position. If your orders weren’t hit for whatever reason, go ahead and close them at the market since I will no longer be following the position.

Since we collected a 50% gain from the first half of this trade, we are exiting United Rentals with an overall gain of 175% in less than two weeks.

This is a great example of the Earnings Drift Alert system at work, so I would love to hear how you did on this trade. What were your gains, and were you happy with the trading process?

Once you’re done with today’s trades, I’d greatly appreciate it if you let me know by emailing me at earningsdrift@sovereignsociety.com.

I keep reading your emails every week, and I’m glad to see that the trading system is performing for you. For those who’ve sent in questions, I plan to answer some in an upcoming mailbag.

As for today’s trades…

A 50% Gain in Garmin

This morning, our position in Garmin (Nasdaq: GRMN) surged to 70%, triggering our orders to sell half the position for a 50% gain in just three days.
As part of our profit-managing strategy, we’re going to place a stop-loss order to secure at least 10% on the second half of the position.

If your orders to sell half your position at a 50% gain haven’t been filled for any reason, go ahead and sell half your position at the market. Then you can manage the remaining half with the 10% stop-loss.

Remember that the trade directions below are based on our official entry price of $2.70. So be sure to place your stop-loss order at whatever price nets you a 10% gain based on your individual entry price. For the portfolio, 10% would be roughly $3.

Here’s your action to take:

Action to Take
Sell Action to Take
Stock: Garmin Ltd. (GRMN)
Option Type: Call Option
Expiration: Jan-20-2017
Strike Price: $47.50
Option Symbol: GRMN170120C00047500
Action: Sell to Close
Order Type: Stop-Loss Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $3
Trade Deadline: Keep this order open until it is filled or canceled.

Exit ADM

Your next action to take is to preserve capital.

On Friday, shares of Archer-Daniels Midland (NYSE: ADM) fell 7% after the company was downgraded by JPMorgan analysts who are concerned about the consequences of Donald Trump’s victory. The firm’s analysts are uncertain about the future of the agriculture industry until Trump’s trade policies become clearer.

Although this event is unrelated to the company’s earnings drift trend, these types of surprise actions can interfere with the trend. So we’re going to take preventative action by exiting the trade today.

As you know, I want to cap losses to 75%, but the quick move in Archer-Daniels places us down about 77%. We’ll get out now to preserve the rest of our capital and put it toward an upcoming trade.

Here’s your action to take:

Action to Take
Sell Action to Take
Stock: Archer-Daniels Midland Company (ADM)
Option Type: Call Option
Expiration: Jan-20-2017
Strike Price: $47
Option Symbol: ADM170120C00047000
Action: Sell to Close
Order Type: Market Order

It’s unfortunate that our uptrend was disrupted for the time being. But all trading systems have to deal with these types of losses every now and then, and our long string of winners more than make up for it.

Portfolio Update

Before I sign off, a quick update on our recent buy…

We added a new position in NVIDIA Corporation (Nasdaq: NVDA) by buying the January $85 call options on Friday — and it’s officially in the portfolio.

Our official entry price is $6.10, my recommended limit price, since the option’s price was above the limit an hour after I sent the alert. The price is now below my limit, so all of your orders should be filled by now.

Based on that entry price, we will set our official orders to sell half the position for a 50% gain at $9.15.

As always, I need your feedback about how the trading process went for you, so please take a moment to fill out the brief survey below when you get the chance.

And remember to keep an eye out for a special mailbag issue, which should hit your inbox within the next week or so.

Until next time, good trading…

Jeff Opdyke
Editor, Earnings Drift Alert