The way to make money in this slapdash market is to buy short-term options and get out fast before the market changes its mind. This morning, I’ll give you three ways to make money today.
First, the buys, or calls…
When you combine investors’ most-hated industry with their most-hated country, you get a contrarian’s wet dream.
There is nothing more despised right now than a Chinese oil company. You wouldn’t give them a dollar on the street for a 7-11 spinning hotdog.
Long #1: PTR
PetroChina Company Limited (NYSE: PTR) produces, refines, distributes, and sells oil and gas in the Middle Kingdom.
Not that we care… We are here to make money from the charts.
The share price is at a 10-year low and has been falling since April. Just look at that pain — it’s been cut in half.
It makes the long list because the MACD has crossed over, there is support going back to 2008, and it’s simply oversold and due for a bounce.
You’ll notice that in December, the MACD crossed and the share price jumped from $102 to $110 in a month. In April, it happened again: It jumped from $105 to $135. That’s a move you can make 1,000% on.
Furthermore, call options are cheap on PTR because investors think it will continue to drop. All the money is on one side of this trade.
Long #2: GoPro
According to its business summary, “GoPro, Inc. develops hardware and software solutions to alleviate consumer pain points associated with capturing, managing, sharing, and enjoying engaging content.”
I would short the company just for that sentence. They need to fire the guy who wrote that — today.
GoPro makes digital cameras and has a YouTube-like space so millions of morons doing face-plants on skateboards can post their failure for the world to see and thus join millions of others who are seeking validation for their uniqueness.
This company will die eventually because the barrier to entry is about as deep as the Rio Grande in Big Bend, but this week, the share price is going to bounce. It is at long-term support, MACD crossed, and there was a volume surge as the weak hands puked out their shares at the bottom.
You can make money on calls from GoPro this week as it bounces back towards its moving average.
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The Short List
There aren’t as many shorts, or puts, this week. For those that don’t know, a put option is a bet that a stock will go down, just as a call option is a bet that a stock will go up. Fewer short plays usually means the market in general will go up.
One chart that sticks out is Royal Caribbean Cruises (NYSE: RCL). The company owns and operates cruise liners.
These are floating Petri dishes of septic diseases that transfer bloated Midwesterners from tourist trap to seaside scam, all the while offering up bland, over-buttered buffet troughs for their culinary delight.
But hey, people seem to like them.
I love RCL as a trading vehicle. Every time a fire or gastrointestinal pandemic breaks out, I buy puts. Every time the price of oil drops, I buy calls.
RCL is heavily dependent on the price of crude. And for some reason, there is always a delay between the news of a ship running aground and the share price dropping, which allows my readers to buy puts.
As you can tell by the chart, the stock has almost doubled over the last year as the oil price has fallen. This is too far, too fast.
You will also note that every time the MACD — that’s the red and blue lines at the bottom of the chart — crosses over above the “2” line, the share price has fallen.
It happened in December, and it happened in August. It will happen again this week. I circled the most recent MACD crossover for your viewing pleasure.
Good hunting,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
