Forgotten Profits Trade Setup Archive

We continue to hold the Enerplus (ERF) January 22 calls.

Days after issuing that buy, the position was up as much as 35%. While we heard some of you banked that gain, we held. We continue to hold today, despite the down move on dividend suspension news. We still have four months remaining on this position. The stock remains wildly oversold now.

We’re holding all other positions, too, including the Red Robin (RRGB) December 60 calls now showing a gain of about 30%. The underlying stock came back as hoped off massively oversold conditions.

We also hold the McDonald’s (MCD) December 95 and January 95 calls, which have come back beautifully. We’re showing gains of 15% and 16%, respectively.

We’ll have more updates and recommendations to you shortly.

Earlier this week, we issued new buys on the Cree December 42.50 calls (already showing a gain of about 30% from a $2.50 entry), Owens Corning January 34 calls (breakeven), Vale December 12 calls (at a loss), and the McDermott International January 6 calls (breakeven).

As that old The Gambler song says, “You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run.  You never count you money when you’re sittin’ at table.  There’ll be time enough for countin’ when the dealin’s done…”

I may not be a country fan.  But that’s just perfect right there.

Calling for the Dow to bounce well off its 200-day moving average was child’s play.  The set-up happened three times in a row and did the same thing each time.

These days, though, things are a bit rough.

While we’ve had an amazing portfolio since December 2013, we did run into some losses.  But we hold everything at the moment.

While we hold all open positions with key catalysts, we have to still be very cautious, as we’ve been warning.  And that’s because the Fed is meeting this week.  Any hint of rising interest rates could send a chill down the spine of every investor, killing the rally almost instantly.

Of the new trades we’ve uncovered, each of these should do well with patience.  Each is over-extended, falling too much, too soon.

Buy one.  Buy them all them all. If you choose not to buy all four of these trades, don’t worry. It’s completely up to you.  We’ll have many more trades on the way.  We wanted to issue an immediate basket of trades.

New trading ideas include:

• Cree (CREE) is part of a significant LED growth story.  It’s unfairly oversold on Williams % Range, for example. We’re recommending that you buy to open the CREE December 2014 42.50 calls up to $3.
• Owens Corning (OC) is sitting at double bottom support with oversold RSI.  We’re recommending that you buy to open the OC January 2015 34 calls up to $2.25.
• Vale SA (VALE) sits at triple bottom support with oversold MACD, and MFI.  We’re recommending that you buy to open the December 2014 12 calls up to $1.50.
• McDermott (MDR) sits at its lower Bollinger Band with oversold Williams % Range and MACD.  We’re simply looking to jump in and out of this trade on the next bounce off oversold conditions.  We’re recommending that you buy to open the MDR January 2015 6 calls up to $1.

We’ll talk again shortly.  Thanks for sticking with us, even as the market loses whatever is left of its mind.

If you have questions or comments, please feel free to reach us any time.

After producing this record since May 27, 2014:

We did run into some losers. But we continue to hold everything.

Thankfully, given market volatility, losses for us haven’t been a historical problem.

Our Enerplus (ERF) position returned as much as 35% gains days after recommendation. It has since pulled back but we continue to hold on excessively oversold conditions. The same holds true for Noodles & Company (NDLS) and Red Robin (RRGB).

These will take a bit more time to pay off. They should pay off quite well, though, given time.

As for new trade ideas, we do have a short opportunity. Typically, we go long most stocks. But this short opportunity may be tough to ignore.

After taking 125% gains on the Staples (SPLS) December 12 calls, the underlying stock is massively overbought on MACD and RSI in a challenging retailer space. The last time SPLS got this high, it collapsed to less than $11 shortly after.

Believing SPLS could pullback nicely here, we’re recommending that you buy to open the SPLS December 2014 13 put up to $1.45.

We see no reason to exit our positions in Red Robin (RRGB) or Noodles & Company (NLDS). Both may be down. But given patience they should come back very nicely. Both stocks are massively oversold and ready to reverse off these lows.

With NDLS, MACD and RSI are literally on the floor.

With RRGB, MACD and RSI are on the floor, as well, as the stock consolidates just under $53.

We have plenty of time remaining on these calls. Hold.

As for our position in Enerplus (ERF), we were up as much as 35% on Friday, as the calls hit $1.55. Today, though, we’re right back to breakeven. We bought as the underlying stock traded at $22. It raced to just under $23 shortly after.

As for gains…

Sell to close the Staples (SPLS) September 2014 12 calls for gains of up to 75%…

Sell to close the Lumber Liquidators (LL) November 2014 60 calls, too, for gains of up to 23%… The underlying stock is up $3.20 today alone.

Just exit these two for gains…

Hold all other open positions.

Since December 2013, we’ve closed a total of 38 winning positions… and only six losers. That’s after we banked 39% and 44% gains on the Hershey (HSY) November 90 and January 90 calls just last week.

Not too shabby…

Today, we’re adding oil and gas drilling company, Enerplus Corporation (ERF) to the portfolio, as an immediate buy. Fundamentally, it’s undervalued with a PEG ratio of just 0.39, telling us its’ 61% undervalued to growth. Industry PEG average sits closer to 0.77, which is also undervalued.

Technically, after a drop from $25 to $22, the underlying stock has caught support, consolidating at $22. MACD is over-extended to the downside. RSI is just beginning to reverse north. And DMI (directional movement indicator) needs to revert to mean, as well.

We’re recommending that you buy to open the ERF January 2015 22 calls up to $1.60.

Hold all other open positions. And stay tuned for new trade opportunities shortly. We’re hard at work on a new batch of trades.

After a rough start with the Lumber Liquidators (LL) November 60 calls, we now show a gain of 21%. If you’re happy with the gain, sell to close half today to secure gains. Hold the second half of the trade a bit longer. The underlying stock is down about 80 cents today after a $2 jump on Tuesday.

Consider these two higher risk trade opportunities.

Shares of Noodles & Company (NDLS) have been absolutely slaughtered since IPO.  But each and every time NDLS gets this low on MACD or RSI, we see a quick bounce to the upside.  We hope to do that again now with a very fast in and out trade.  Get in, wait for bounce, and get out.  That’s it.

With a -35% stop loss in place, buy to open the NDLS November 2014 22.50 calls up to $1.85.

Another trade with further potential upside is Red Robin Gourmet Burgers (RRGB).  After gapping down from $65 to $54, it’s still massively oversold.  MACD and RSI are also over-extended and need to revert to mean.  When RSI gets this low, we typically see a bounce.  The stock may have jumped $2.25 on Friday but we see further moves north.

With a -35% stop loss in place, buy to open the RRGB December 2014 60 calls up to $3.

We’ll talk again soon.  Until then, take good care.

Well that was ridiculously easy.

On August 4, we recommended a buy on the HSY January 2015 90 call as it traded at just $3.10.  Today, it’s up to $4 for gains of 29%.  Sell to close just half of the position to secure that quick gain.

We also recommended a buy on the HSY November 2014 90 calls as it traded at just $2.60.  It just hit $3.50.  That’s good for a gain of 35%.  Sell to close half of this position, as well.

Hold the second half of both positions.

Congratulations on the gains.

There’s good news… and there’s bad news.

The bad news — The second half of the Bed Bath & Beyond (BBBY) August 2014 60 call is down 11%.  Close this position today for a loss, as we head into Friday expiration.  We walk with a net gain on this trade, though, after closing the first half for gains of up to 56%.

The good news – the Ross Stores (ROST) November 2014 65 call now trades at $3.75.  That’s good for gains of up to 50%.  Sell to close the second half of this position today.  We closed the first half on July 30 for up to 56% gains.

Hold all other open positions, including the Hershey (HSY) and McDonald’s (MCD) positions already showing gains.

Stay tuned for more updates and new trades shortly.

This was an easy one.

After the Street discounted Ross Stores (ROST), we jumped on it with the ROST November 65 calls at $2.50.  As of today, ROST is up another $1.05, sending the calls to $3.20.  If you’re happy with the current gain, sell to close half of the position today to secure gains.  Be sure to hold the second half for a bit longer.

Hold all other positions.

As for new recommendations, let’s jump on McDonald’s (MCD) as the Street discounts a great name.  It’s now down $9 a share off its 2014 highs, becoming massively oversold on MACD and RSI.  The last time MCD got this oversold was November 2012 before the stock ran from $80 to $100.

We believe China and US concerns have been priced in.

• Buy to open the MCD January 2015 95 calls up to $3…
• Buy to open the MCD December 2014 95 calls up to $2.50…

When Wall Street finally wakes up and sees just how oversold MCD has become, we expect to see a good rally.