Trade Alert: Lock in Double-Digit Gains

Last week, I promised an optimistic update on Valeant Pharmaceuticals (NYSE: VRX), and I have one today.

But before I jump into that, I want to lock in profits today. We’re going to sell half of four positions that are up more than 15% each: Micron Technology (Nasdaq: MU), which is up 15.6%; Seagate Technology (Nasdaq: STX), up 17.86%; Cowen Group (Nasdaq: COWN), up 16%; and The GEO Group (NYSE: GEO), up 19.48%.

We still have several months on each of these prime seasons, and while I expect these gains to continue growing, I also know an open gain is one we may never realize.

Given the recent surge in the markets since the election, an eventual pause or pullback is inevitable. That’s why we’re going to sell half of these four positions at the market today. After that, we’re going to place a stop-loss to protect a 10% gain on the second half of the trades.

Here are your actions to take to lock in profits:

Action to Take — Sell Half
Stock/ETF: Seagate Technology
Ticker: Nasdaq: STX
Type of Order: Market Order
Action: Sell to Close Half
Sell Price: Market

 

Action to Take — Sell Half
Stock/ETF: Micron Technology Inc.
Ticker: Nasdaq: MU
Type of Order: Market Order
Action: Sell to Close Half
Sell Price: Market

 

Bonus Trade: Action to Take — Sell Half
Stock/ETF: Cowen Group
Ticker: Nasdaq: COWN
Type of Order: Market Order
Action: Sell to Close Half
Sell Price: Market

 

Bonus Trade: Action to Take — Sell Half
Stock/ETF: The GEO Group
Ticker: NYSE: GEO
Type of Order: Market Order
Action: Sell to Close Half
Sell Price: Market

Once those orders have been executed and half of your open positions have been sold, we are going to place a protective stop at a 10% gain to ensure a profit on these positions.

Action to Take
Stock/ETF: Seagate Technology
Ticker: Nasdaq: STX
Type of Order: Good ‘Til Canceled Stop-Loss
Action: Sell to Close
Stop Price: $37.10

 

Action to Take
Stock/ETF: Micron Technology Inc.
Ticker: Nasdaq: MU
Type of Order: Good ‘Til Canceled Stop-Loss
Action: Sell to Close
Stop Price: $19.30

 

Bonus Trade: Action to Take
Stock/ETF: Cowen Group
Ticker: Nasdaq: COWN
Type of Order: Good ‘Til Canceled Stop-Loss
Action: Sell to Close
Stop Price: $15.40

 

Bonus Trade: Action to Take
Stock/ETF: The GEO Group
Ticker: NYSE: GEO
Type of Order: Good ‘Til Canceled Stop-Loss
Action: Sell to Close
Stop Price: $31.85

Valeant: Approaching Its Best Month

Now that that’s taken care of, let’s talk about Valeant.

The stock experienced another rough week last week, recovering from a downgrade that sent the stock 7% lower at one point on Thursday. Shares bounced higher from those lows, and I expect them to continue higher into the new year — mainly because of one seasonality chart I pulled recently.

Take a look.

See larger image

You will notice the month of December is historically a positive month, indicated by the blue bar extending above the 100 level. But January has been the best month seasonally for the stock in the past decade.

If history is any indicator of what we can expect from shares of Valeant in the next month and a half, we will see a nice bounce higher from here — one that can easily put us into a profitable position and even hand us a sizable gain.

That’s the main reason I’m not in panic mode with our position down about 20%. The stock has been bouncing around on a lot of news, but the news has all been negative so far. Once we get a stretch of some positive news, we could see spikes of 30% or 50% in a single day.

So sit tight, and I’ll keep you updated on any new developments with Valeant and the rest of the stocks in our portfolio.

That’s it for this week. I will not send you our regular weekly email next week as I will be out of town celebrating Christmas with friends and family. I’ll still follow the markets when they are open and alert you if needed.

In the meantime, I would like to wish you and your family happy holidays.

Regards,

Chad Shoop
Editor, Automatic Profits Alert