Forgotten Profits Trade Setup Archive

My eTrade information didn’t update correctly.

In the last alert, we mentioned buying the DECK June 2015 67.50 call up to $2.30. I was quoted a price of less than that originally.

When it corrected, I had a bid-ask of well over $6.

If you still bought at the higher price, that’s fine. And we will track it for you.

If not, instead consider buying the underlying stock itself and, or the DECK April 70 call up to $4.20.

You’ve got to love technology these days.

Elsewhere, over the last week, we have not closed any positions in Forgotten Profits.

We continue to hold all open trades, including the American Airlines May 46 put. This is coming back beautifully, as the underlying stock has dropped about $5 in two days.

Last week, we did open a new trade in oversold KB Home (KBH).

While I am a housing bear given flat wages and no real employment growth, even I had to agree that this builder became too oversold. So far, we’ve been right as the stock begins to move higher.

We opened a trade in the KBH March 12 call at 95 cents, and a trade in the April 12 call at $1.15.

Look for new trades and our latest webinar news shortly.

Ian L. Cooper
Forgotten Profits

IMPORTANT: Make sure you read this post as there was an error with this price quote.

In December 2012, Deckers Outdoor (DECK) warned on sales. The stock fell from about $50 to $35 before recovering to $66 highs.

In 2014, the stock fell from $90 to $75 on sales again before running to $100 highs.

Just the other day, the company missed its numbers and cut its outlook. And again the stock plummeted.

But it’s now become massively oversold on RSI, MACD and Money Flow to a point where we see a historical bounce.

And we believe it could recover well, handing us respectable gains with patience.

In addition to holding all open trades, consider buying to open the DECK June 2015 67.50 call up to $2.30.

Good Investing,

Ian L. Cooper
Forgotten Profits

I’m not a housing bull.

I’ve been bearish on the sector since 2008.

I still don’t believe there’s a recovery because one wouldn’t make sense without exemplary employment growth and wage growth. Recent earnings and margin pressures at KB Home and Lennar aren’t encouraging either.

Pretending these realities don’t exist won’t make things better.

But even I have to agree, the latest sell off in builders, like KBH was overkill, setting it up for a quick, near term dead cat bounce from oversold technical reads. If we examine just MACD and RSI here, we can see that every time these levels overbought conditions surface, this stock – no matter how severe the news – has a tendency to reverse for a bit.

And that’s what I’m looking to profit from very quickly. I want to get in and out of the trade in days, bearish on housing or not.

Consider buying to open KBH calls. There are two ways to trade this opportunity.

One, consider buying the KBH March 2015 121 call up to $1.

And, or two, consider buying to open the April 2015 12 call up to $1.35.

Hold all other existing trades. I’ll talk to you again shortly.

My apologies for having to change the webinar time last week… I broke my wrist and finger, falling on the ice and found myself in the hospital for longer than hoped.

I did not open or close any trades last week, given wild volatility and my wrist.

Take good care,

Ian L. Cooper
Forgotten Profits

Please join us this Friday, January 23, 2015 at 12 EST for the latest Forgotten Profits webinar.

Over the last week, I opened a position in Finish Line (FINL) with a May 25 call at a price of $1.65. It currently trades at $1.45. I see no reason to exit. After testing $25, it pulled back slightly finding new support. I’d like to see a gap refill to $29.

I also closed the second half of the Activision (ATVI) February 20 put with gains of 38%. This was closed just in time. The underlying soared a few days later to $20.25.

Look for new positions shortly.

Take good care,

Ian L. Cooper
Forgotten Profits

While holding all other positions, consider closing the second half of the Activision (ATVI) February 20 put for gains. The stock has pulled back nicely after failing at $22 double top resistance.

Also, shortly after recommending a buy on the Finish Line (FINL) May 25 call option, the underlying stock found support just above and made a move to $24.60. I’d like to se FINL refill its bearish gap around $29 before closing this trade.

Stay tuned for more shortly.

Ian L. Cooper
Forgotten Profits

From now on, we will issue weekly alerts on any weekly activity from Forgotten Profits. This way, we can keep you up to date, and issue reminders on recent buy and exit activity.

Also, please note that our next webinar will be held January 23, 2015. Please stay tuned for times and e-mailed reminders.

Since January 5, 2015, we’ve closed the following positions:

• The Enerplus (ERF) January 22 calls at a loss
• The Celgene (CELG) January 100 put at a loss
• The Dow Jones (DIA) March 176 put for gains of 49% and 46%

Since January 2, 2015, we’ve opened the following positions:

• The AT&T (T) March 33 put at 96 cents
• The QQQ March 98 put at $2.70

Stay tuned for more buys and update shortly.

Have a great week.

Ian L. Cooper
Forgotten Profits

The herd isn’t rational. It never has been. It never will be.

It’s driven by extreme forces of fear and greed. Stocks get too high because of it. Stocks get crushed because of it, too.

But if you can spot the extremes, you put yourself ahead of the game.

Look at Finish Line (FINL), for example. In December 2014, it was crushed on earnings, gapping from a high of $29 to less than $23 in no time at all.

If we look at RSI, MACD and MFI, though, we can see that it’s still over-extended, likely to move higher than it has in recent days.

MFI is now sitting at its 20-line. Each time the stock gets that low on MFI, we see a respectable rally. RSI is at its 30-line where we see rallies, too. Even MACD has extended to a prior low.

The last time MACD was this low, the stock rallied shortly after from $24.40 to $29.

Despite a recent move higher in the stock, I believe FINL could refill the latest bearish gap at $29.

Consider buying to open the FINL May 2015 25 call up to $2.20.

It’ll be interesting to see if this rally has legs…

For now, traders believe it does. I’m not so sure.

While the bulls come back out of hiding today, I’m recommending that you sell to close the second half of the DIA March 2015 176 put for quick gains.

It’s not worth risking these gains to this market.

We’ll talk again soon. Take good care. Hold all other open positions.

Ian L. Cooper
Forgotten Profits

Just yesterday, we exited half of the DIA March 176 put for solid, quick gains of up to 49%. Today, the put is up to $6.65, moving higher as the Dow pulls back another 100 points. Hold.

Unfortunately for the bulls, there’s not much to get excited about. Oil and related names are still plunging. Global markets are getting crushed. There’s a lot of fear out there. Unless the major indices can hold their 50-day moving averages, or prior support levels, they could retest 200-day moving averages.

While I’m recommending that you hold the second half of the DIA put, consider buying to open the QQQ March 2015 98 put up to $3.25. This will give us exposure to NASDAQ downside, too.

Ian L. Cooper
Forgotten Profits

Happy New Year…

Here’s to a happy, healthy and profitable year.

When we last spoke, I recommended a buy on DIA March 2015 176 put, arguing the Dow was likely to fail at a double top and move lower.

That’s exactly what happened.

On failure, the Dow is down 236 points on the day, sending our put as high as $5.64.

If you’re happy with the gain, I’m recommending that you sell to close half to secure gains here.

While I believe the Dow could easily plummet to 17,200, challenging prior support, it’s still best to protect gains in this market.

Congratulations on the gain.

Aside from that trade – and the winners we closed in 2014 – I do have some losers to close out, including Enerplus (ERF) and Celgene (CELG).

When we first bought the ERF January 22 call, it was up as much as 22% in the first few days. But when oil flopped, so did ERF.

If you still hold this trade, sell to close, or allow it to expire.

As for CELG, despite overbought conditions, the underlying stock continued to push higher.

If you still hold the trade, consider selling to close, or allow it to expire this month.

Hold all other trades.

We’re looking for new opportunities as we speak. Stay tuned for that.

Ian L. Cooper
Forgotten Profits