ACTIONS:
Buy Dot Hill Systems (HILL) common stock at current levels.
Buy Psychemedics (PMD) common stock at current levels.
Buy to open the WFC October 60 calls (WFC151016C00060000, $0.67, up $0.05) at current levels.
Dear Momentum Stocks Weekly Subscriber,
Today I am recommending two new common stock trades and one longer-term bullish option trade for the portfolio. I will provide additional commentary and chart work on each trade in next Monday’s update.
Stock Trades
Dot Hill Systems (HILL, $6.80, up $0.36)
Buy Dot Hill Systems (HILL) common stock at current levels.
We were recently stopped out of our previous HILL trade for a 48% gain. Shares continue to show strength, and I have said that a run to $8-$10 is possible this year.
Earnings are due out on Thursday, May 7. Wall Street is expecting a profit of $0.06 a share on revenue north of $59 million. The company has beaten or matched estimates the past four quarters, and another upside surprise could easily push shares past $7.
Psychemedics (PMD, $15.67, down $0.25)
Buy Psychemedics (PMD) common stock at current levels.
I have recommended shares of PMD in the past, and I like them again at current levels. The stock currently yields 3.6% and pays a $0.60 annual dividend.
Option Trade
Wells Fargo (WFC, $55.97, up $0.24)
Buy to open the WFC October 60 calls (WFC151016C00060000, $0.67, up $0.05) at current levels.
The 52-week high for the common stock is at $56.26, and the shares are holding their 50-day moving average. A close above $55.75 should be the trigger that gets shares pushing fresh all-time highs. I like these call options to play a run past $60 by mid-October. These are the regular monthly calls that expire on Oct. 16.
All prices given in this update are current as 2:10 p.m. EST.
Every new Momentum Stocks Weekly recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Trade on!
Rick Rouse
Editor
Momentum Stocks Weekly