Forgotten Profits Trade Setup Archive

This is overkill now.

After recommending trades on Lumber Liquidator calls yesterday, the underlying stock too a dive on a Senate Democrat request for a probe.

Not only is the company already under investigation, a lot of recent activity stems from short sellers. In fact, it was a 25-year-old short seller China that sparked the bear raid. Then, 60 Minutes featured short seller, Whitney Tilson and two attorneys backed by short sellers.

Now a Senator wants to look into it more.

But as I mentioned yesterday, if there was a substantial problem, we would see medical reports of the victims, word from regulators, and something other than the word of short sellers.

While our LL position has started out poorly, we are holding.

After closing many, many wins, we do have positions that are down. But we see no reason to exit any yet. We are looking for another wildly profitable year of trades.

Ian L. Cooper
Forgotten Profits

Lumber Liquidators (LL) was destroyed yesterday on a 60 Minutes report. What was interesting is that the report relied not only on the stock’s short seller, Whitney Tilson but two attorneys that are backed by the same short seller.

But here’s the thing.

Where were the victim accounts on the report? There was no feedback from regulators. And the report relied solely on factory workers.

To me, this was simply a bear raid report crafted by short sellers.

I believe today’s bounce off lows is just getting started. It may be up $2.80, but there’s still a big gap to fill.

Consider buying to open a small position in the LL May 2015 42 calls up to $6. And, or consider buying to open the LL May 2015 44 calls up to $5.

The stock is brutally oversold technically.

Ian L. Cooper
Forgotten Profits

Over the last week, I opened a new Forgotten Profits trade with the DIA April 179 put. I’m hesitant to really go long new trades at the moment, as the indexes challenge massive overhead resistance just above 18,000.

If we fail here, we could fall back to the 200-day moving average, as we’ve seen happen many times in the past.

I do have my eye on a few opportunities, though. But I don’t want to issue them at the wrong time, and watch the market fall apart as it did this morning. Please stay tuned for those trades.

Also, I’m recommending that you sell to close the SNY June 47 call. After buying at $2.75 on November 14, 2014, it now trades around $4. It’s best to take the gain now, as the stock begins to look a bit toppy.

Good Investing,

Ian L. Cooper
Forgotten Profits

Hello all… Ian Cooper here.

I’ve been watching the market with great concern, as the major indices challenge heavy triple top resistance with bearish signs on MACD, MFI and RSI beginning to emerge.

If this top gives way with no real sustainable news or momentum, the Dow could easily reverse back to its 200-day moving average. I’ve seen this happen — and play out the same way – going back to late 2013.

We also have to consider the likelihood for greater volatility if oil continues to fall, and if the Greece bailout talks fail to result in anything positive by March 1, 2015 deadline. The Greek government has fully rejected an extension so far.

Europe is already on the brink of depression. If this Greek issue is not resolved by the set deadline, it could set off a firestorm all over Europe.

I have a feeling things will not end well.

While we continue to hold all open positions, I am recommending that you buy to open a Dow Jones put, using the DIA April 2015 179 put up to $4.20.

Aside from this new trade, hold all current positions… and be sure to join us this Friday at 12 p.m. EST for our next scheduled webinar.

Good Investing,

Ian L. Cooper
Forgotten Profits

DECK is up another $1.26.

The move has only accelerated our gains on the DECK March 75 and April 75 calls. But with time decay ticking higher, I’m recommending that you sell to close these two calls for very easy, quick gains.

Congratulations on such fast gains.

At the same time, though, I want to buy to open even more DECK calls with a longer time frame because the stock is still – unbelievably – oversold. Once you close the two calls mentioned above, buy to open the following trades.

Buy to open the DECK June 2015 80 call up to $5.50…
Buy to open the DECK June 2015 77.50 call up to $6.50…

Prepare for another round of good gains. Just don’t risk the house.

Ian L. Cooper
Forgotten Profits

DECK is up another $2.36 on the day to $75.10.

The move has added some good upside to our newly bought DECK March 75 and April 75 calls.

While I’m still looking for a bearish gap refill, I’m recommending that you sell to close half of these trades today to secure gains. Let’s also exit half of the DECK stock while we’re at it for close to $8 gains in just over a week.

The last thing I want to see is a repeat of the pullback we saw over the last two trading days.

Hold the second halves.

Ian L. Cooper
Forgotten Profits

Let’s protect some DECK gains.

Sell to close the DECK June 2015 67.50 calls, as well as the April 70 calls for gains. I just want to protect current gains. Be sure to hold the DECK April 75 calls and March 75 calls, though, as well as the underlying stock.

DECK is still very much oversold. But I want to protect some of what we have.

At the same time, sell to close the KBH March 12 calls and April 12 calls for gains, too.

Hold all other trades, including the American Airlines (AAL) May 46 put. The stock is reversing nicely on oil’s latest move higher.

Over the last week, we opened a few trades on the over-extension in shares of DECK.

Stay tuned for more.

Ian L. Cooper
Forgotten Profits

Our DECK trades are working out very well… and we see no reason to exit any more of the trades at the moment.

What I want to do now, though, is open new call options, as MACD, RSI and MFI remain at oversold levels. I still think DECK could move to refill its gap at $82 when our indicators correct higher.

We can make money by trading this two ways.

One, consider buying to open the April 2015 75 call up to $4… and, or the March 2015 75 call up to $3.

I believe both should do just as well as our currently held DECK trades.

Hold all other trades.

Ian L. Cooper
Forgotten Profits

If you’re good with the latest gains on the KBH March 12 and April 12 calls, consider protecting gains by exiting half of each position.

I’d like to see KBH refill its bearish gap at $16.50 before closing the second half.

I may hate homebuilder stocks, but the overextension here was tough to ignore.

Hold all other trades.

Ian L. Cooper
Forgotten Profits

Shortly after issuing trades on the DECK stock, the June 67.50 calls, and the April 70 calls, news hit that Goldman Sachs upgraded the name, arguing for 30% upside.

We were in long before the news hit.

Today, the underlying stock is up another $2.15 on the day, sending our trades higher.

While holding all of the stock (up 6%), consider selling to close half of the call trades to protect gains. I’ll look to exit the second half at a later date.

I’m looking for a gap refill around $80 before closing this out.

Hold all other trades.

Ian L. Cooper
Forgotten Profits