Trade Alert: Another 50% Gain and a New Buy

It’s been an exciting week in Earnings Drift Alert. Starting last Monday, we locked in gains of 100%, 50% and 50% all in about a week’s time or less — and today we’re locking in another 50% profit!

On top of that, I have a new trade for you today. But first, let’s talk about our gains…

Yesterday, shortly after I recommended increasing the stop-loss on our Akamai Technologies November calls to capture a 50% gain on the last half of the trade, the stock jumped, triggering our orders.

That means we captured an average 50% return on this position in just three days: We grabbed a 50% gain on the first half of this trade on October 27 (one day after making the trade), and today we made a 50% gain on the second half.

If your orders weren’t triggered, go ahead and close the position at the market since I will no longer be following the trade.

And remember, I’m always looking for feedback on our trades, so please let me know how this one panned out for you. I’d greatly appreciate it if you could quickly email me at earningsdrift@sovereignsociety.com.

Just let me know if you’re enjoying the Earnings Drift Alert system, and what kinds of gains you saw from the complete Akamai trade. I’ve been reading the notes you’ve sent in already, and it’s great to see how positive the experience has been for you all so far.

Now let’s turn to the new position we’re adding today…

Our New Buy

Between last night and this morning, we had several companies on our watch list announce earnings, and one met my parameters — Archer-Daniels Midland (NYSE: ADM), the agricultural juggernaut.

I’ve followed the company for over half a decade because it has an incredibly promising future: The world’s demand for food is exploding as the global population continues to grow and as people the world over climb into the middle class, adding more nutrition to their diets. Archer-Daniels Midland is a clear beneficiary of that trend.

Our opportunity today, however, isn’t focused on that long-term view. Instead, we’re simply playing off of the typical upward momentum Archer-Daniels’ experiences after a bright earnings report. See, this morning the company smoked expectations by announcing earnings nearly 30% above analysts’ expectations — and the stock soared 7% today.

Based on our extensive research into how each stock performs given a set of parameters, we know Archer-Daniels Midland stock should rise from now over the next two months. To benefit, we are going to purchase call options that cover that time frame.

Here’s your action to take:

Action to Take
Buy Action to Take
Stock: Archer-Daniels-Midland Company (ADM)
Option Type: Call Option
Expiration: Jan-20-2017
Strike Price: $47
Option Symbol: ADM170120C00047000
Action: Buy to Open
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $2
Trade Deadline: If your order is not filled by my next update, I will update you on the trade.
Note: Do not place a market order. Set the limit order at $2.
Once this order is filled, place the following order:
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 Half
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: Whatever nets you a 50% gain.
Trade Deadline: Keep this order open until it is filled or canceled.
Note: This second order will allow us to collect a 50% gain on half of our position in the event that a quick move happens before I can get a trade alert out to you.

That’s all for now, but keep an eye out for a new trade tomorrow. You might remember that we had a trade triggered for United Rentals Inc., which met our parameters in the wake of its earnings report a couple weeks ago. Tomorrow, we’ll be ready to jump into that position.

Until next time, good trading…

Jeff Opdyke
Editor, Earnings Drift Alert