Forgotten Profits Trade Setup Archive

We’ve traded JCP on and off for years…

While its down considerably from recent highs, there’s still an opportunity.

Months after Sterne Agee foolishly upgraded JC Penney (JCP) from a neutral rating to a buy rating with a $13 price target shares of the stock ran as high as $10.09.

Then, reality struck… and the stock began its descent to $6.93. Nowadays, as consumers remain uneasy in a volatile economy, shares are referred to as an oversold overreaction… as the CEO remains upbeat about the holiday season.

Others believe the company could achieve profitability by 2017…

I don’t believe JCP will last that long. In fact, with decreasing capital, high debt, and discouraged investors, the only thing I’m confident in is further JCP downside. We can trade this by buying to open the JCP February 2016 7 put up to 90 cents and / or the JCP May 2016 7 put up to $1.45.

Ian L. Cooper
Forgotten Profits

While analysts gush all over shares of Coke (KO) on the long side, consider this. The stock has become over-extended, challenging an area where the stock has now failed four times since September 2014. We don’t believe the stock is strong enough to break out here.

One of the best ways to profit from a very likely pullback in the name is by buying to open the Coke (KO) February 2015 43 put up to $1.45 and / or the KO February 42 put up to $1. Both should do very well with patience.

Ian L. Cooper
Forgotten Profits

Clovis Oncology (CLVS) is making major headlines today after falling 72% or $71.80. But what we’re seeing is a major overreaction to news the FDA is requested further information for efficacy analysis in drugs for the treatment of EGFR T790M-positive lung cancer.

While the company will provide the necessary information, it’s likely to delay potential approval beyond the expected March 2016 PDUFA date. We believe approval will come shortly after that time and are using today’s sell off as an opportunity to back up the truck on a well-respected company.

This news does not warrant such a sell off.

There are two ways to trade this opportunity long-term. One, buy just CLVS stock up to $30 a share… And, or two buy to open the January 2015 35 call at market.

Ian L. Cooper
Forgotten Profits

Using an entry price of $2.10 on the Pandora (P) January 2016 12 call – recommended on November 2 – we’re now looking at a gain of about 60%, excluding commissions.

Hold the second half a bit longer.

There’s still a massive bearish gap to refill at $19 at some point.

Stay tuned for new trading ideas shortly. The market is a bit of a mess right now.

Ian L. Cooper
Forgotten Profits

On October 12, I issued a buy alert on Amicus Therapeutics (FOLD). The stock traded at $7.35. The April 2016 8 calls trades at $1.85.

Today, the stock is up to $10.30. The calls last traded at $3.50.

Close both positions to secure the gains.

Ian L. Cooper
Forgotten Profits

Patience pays off quite well…

Disney (DIS) has had one heck of a run off its lows…

After buying the stock at $108, and the January 115 calls at $4, we’re now looking at gains on both trades.

The stock last traded at $115.20. Sell.

The calls last traded at $4.75. Sell to close.

The stock is beginning to look a bit over-extended after this run. I’d rather not risk gains to a potential pullback.

We’re also showing gains on Amicus (FOLD). After buying the stock at $7.35, it’s now up to $8.52 intra-day. Consider selling just half of the stock. Hold the April 8 call option.

As for new trade ideas, Pandora (P) offers quite an opportunity after getting crushed on earnings. But as with most opportunities, patience is required. Pandora is massively oversold on MACD, MFI and RSI. Patience should pay off.

Consider buying the stock up to $14 and / or the Pandora (P) January 2016 12 call up to $2.30.

Well… that was easy.

On Tuesday, I issued a buy on ABBV after it was destroyed on overreaction. We picked up the underlying stock around $52.50. And we picked up the ABBV January 52.50 calls around $3.20, as well.

Today, the stock gapped up to an intra-day high of $60.73. And I’m recommending that you close the stock for gains.

As for the calls, they last traded at $8.50 on the day. Sell to close.

Congratulations on the quick gain. Stay tuned for more.

Have a great weekend.

Ian L. Cooper
Forgotten Profits

Shares of AbbVie (ABBV) plummeted the other day after the FDA warned that the company’s hepatitis C treatments – Viekira Pak and Technivie – could cause serious injury to the liver mostly in patients with underlying advanced liver disease.

In the warning, the FDA noted 26 cases of liver issues had been reported since the drugs were approved.

Some of the cases led to liver transplants and death.

As a result, the government agency demanded stronger warnings of labels, which lead to the stock decline.

However, many analysts consider the decline to be an overreaction, considering that only three to five percent of the hepatitis population suffers from advanced forms of liver disease. That tells us the long-term impact of the FDA news on the stock could be modest.

Also, when it comes to ABBV, we have to consider that the drugs were never meant for – or approved – for patients with underlying advanced liver disease.

Plus, these 26 cases of liver injury were possibly” related to the two drugs. Possibly resulted in a 15% decline.

There are two ways to trade the stock.

One, consider buying just the stock up to $54. Near-term, I’d like to see a bearish gap refill at $56 before a move higher. And or two, consider buying to open the ABBV January 2016 52.50 calls at market.

In recent weeks, shares of Amicus Therapeutics (FOLD) plunged from $15 to $6 on news the FDA is asked for more information on its treatment for Fabry disease, an inherited disorder stemming from a buildup of a fat in the body called globotriaosylceramide.

It means FOLD can’t file for approval this year, as hoped.

While it’s bad news for the near-term, the sell off presents us with a great buy opportunity in a hot biotech trade with recent insider buying.   Major shareholders at Perspective Advisors recently bought 750,000 shares on October 6 for $5.032 million.

There are two ways to trade the stock.

One, buy the underlying stock up to $8.50… And or two, buy to open the FOLD April 2016 8 calls at market.

Plan to hold for the long haul.

Hold all other open positions. While we have positions in the red, we just got finished closing 15 winning positions between June 22 and October 9.

Stay tuned for new trade alerts…

Until then, take good care.

Ian L. Cooper
Forgotten Profits

Since recommending the InterOil (IOC) stock and November 35 calls at $35 and $4.45, respectively, the stock has moved to just under $39 a share. That gives us an 11% gain on the stock, and a 24% gain on the calls, which now trades with a bid-ask of $5.25 x $6.35. Close both positions. The underlying stock is becoming a bit over-extended.

Ian L. Cooper
Forgotten Profits