This Is No Weasel


Wolverine could be a horror-flick due out this summer in movie theaters. It could be an animal that resembles a small bear (but is actually the largest member of the weasel family). Alumni of the University of Michigan have their own idea of what a Wolverine is.

But in my February 20th newsletter, I focused on the company called Wolverine World Wide Inc., a maker of footwear and apparel.

On February 19th, WWW jumped strongly in response to a good earnings report. Wolverine’s earnings report produced a 60% increase in revenue and earnings 54% higher than expected, and the stock gained 5% on volume 260% above the average level.

I mentioned that Wolverine had completed the acquisition of four brands, and the CEO's focus on building the brands' momentum.

I found a strong seasonal pattern for WWW, saying ” It has increased an average 9.2% over the next 9 weeks, with gains in a whopping 90% of the years. That’s 26 out of the last 29 years.

I had backtest results showing that by itself the 9-week seasonal was a very reliable trade with low draw-downs.

WWW didn't have actively traded options, so I suggested a stock-only trade, although I did suggest a way to do covered calls on stocks with illiquid options.

WWW consolidated over the next month, with volume on up-close days generally overwhelming volume on down-close days. Then, in late March, WWW broke above the previous highs on above-average volume. This was a good add-to-the-position situation.

That high volume breakout in February was the initial indication of institutional participation and the late-March breakout was confirmation.

WWW pulled back to its 50-day moving average and didn't violate it, while the S&P 500 pulled back and did violate its 50-day MA in June.

This Tuesday, Wolverine reported good earnings again. It beat earnings estimates by 35% and quarterly revenue was up 88% (y-o-y).

One again, the stock responded by gapping upwards and closing higher on very high volume. This time it was followed by two continuation days with very high volume. Once again this is a good add-to-the-position situation.

WWW is now up 30% from my February 20th article. The recent breakout strongly suggests this stock has plenty of upside potential left.

When you find all the ducks in a row, meaning good fundamentals, good earnings, good technicals, and a good seasonal (a strong track record of gains in previous years during the current time frame), you are staring at what may turn out to be one of your best trades of the year.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2013 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.