Ever hear the one about the pharmacists, the athlete, and the renovator?
It’s no joke!
In this article, we go through five stocks currently trading at under $10 that have traders feeling bullish.
A mix of pharmacy, sports retailing, and homewares, read on for the details of where you should be investing.
Investing in cheap stocks
If a stock has a low price, you can bet that at some point it will experience a spike in price, and this leads traders to target these stocks very often in the hope that they do.
There is plenty of money to be made in the low-price trading game, and those that are prepared to do so can share in this wealth.
You’d be best to stick to charts and the analysis of the technical experts when doing so, rather than just buying something for the sole reason that it’s cheap (why is it so?).
Plenty of commentators can be found online that will keep their followers up to date with the latest information in trends and pricing charts.
Examples of great $10 stock targets could be those high-probability setups you hear about a lot.
Or, they could be breakout candidates, new to the market, or those with financials that are making investors feel bullish about the stock price forecast.
Now, let’s go through five current ones being advised to buy by traders.
The first in our trio of pharmaceuticals is Aratana Therapeutics, which recently appointed a new Chief Operations Officer.
This globally-minded company focuses its business activities on the development, licensing and the commercialization (to bring to market) of biopharmaceuticals aimed at animals.
Its website calls the company a Pet Therapeutics company.
The Bulls have been sharpening their horns in regards to this stock over the last few months, and its shares are trending higher by a very strong 22.2%.
The detailed chart above shows that the stock performed what industry insiders called a double bottom chart pattern very recently, with shares attracting lots of buying interest when around the $5.70 per share mark, during the last two months.
Shares have recently begun to trend back over the 200-day average of what was $6.14 a share and the average of the most recent quarter of that period, the slightly higher figure of $6.39 a share.
The trend we see is very rapidly pushing the stock to within range of kick-starting a short-term breakout trade above key overhead resistance measures.
Savvy traders will now be looking for long-bias trading strategies in this Therapeutics player, should it manage to break out above the near-term average overheads of between $6.75 per share and $6.90 per share and then even move above further resistance at $7 per share with a volume hitting near or above the 90-day moving action average of around 735k shares.
Should that breakout be triggered anytime soon, the stock will see the proceeding overhead resistance level spike to $7.50 to possibly $7.66, or even as high as somewhere between $7.75 and $8.84 per share.
The advice is as follows: buy the stock off weakness in order to anticipate this breakout and then sagely use a stop that is equal to the 200-day average we mentioned earlier, $6.14 per share, or even nearer to the double bottom levels we mentioned.
If one chooses to buy off strength instead, our advice is to do so once those breakout levels are eclipsed with volume, and then safely use a stop that sits a nice, comfortable percentage level from your initial entry point.
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This is a Canadian market-focused company that is currently developing a therapeutic drug that aims to treat autoimmune diseases.
With a current stock price of less than $10 and a six-month increase of 15.2% up until now, it is trending within the range of triggering what investors call a near-term breakout trade.
The following chart demonstrates its rising trend, or uptrending, especially for the last two months, going from just over $2 a share to $3 a share.
The bullish technical price action which is making this a must-have for many investors is the fact that during this uptrend period, Aurinia has been making higher highs and higher lows.
In the face of key overhead resistance (the amount the company is spending) these trends are what has moved it into breakout trading territory.
Out advice for market players is to look for what industry lexicographers call long-bias trades, in shares of Aurinia, but only if they manage to:
- Break-out above the short-term overheads resistance levels at $2.90 – $3 a share
- And then, move above the more key (long-term) resistance levels at trading prices of between $3.25 and $3.30 a share, with some higher volumes.
Investors should specifically look for moves or closes that are above the levels with a volume that registers near, or preferably above, the three-month average action: 33,505 shares in total.
Should the breakout fire off all guns blazing, the stock will almost certainly rise even further to almost $4 or maybe even almost $5.
Smart traders are buying Aurinia stocks off weakness in order to anticipate said breakout, and thus have the ability to use a stop that sits a little below the 200-day moving average which measures at $2.66 per share, or the near-term support average of around $2.50 a share.
Or, a clever trader could decide to sell shares off strength once clearing of breakout levels commences (which it will) and then conversely use a stop that sits a fairly comfortable percentage level from your initial entry point.
The third leg of our tripod of pharmaceuticals is KemPharm.
This company works in the U.S market, discovering and developing new proprietary prodrugs.
It has been spiking within the range of trigger a huge breakout.
Sellers have acted to destroy its value over the last few months, almost falling by a staggering 80%.
The chart shown here helps us notice several things.
Firstly, the downtrend over the last month is as clear as day.
Shares have fallen sharply lower of the highest levels of $7.84 to the lowest for a whole year, a measly $3.52 a share.
In the time that downtrend was occurring, the stock was making lower lows and lower highs, which is what is called bearish technical price action in the industry, as opposed to bullish.
With that being said, shares have thankfully rebounded from that poor performance, and rapid movement in the opposite direction has seen many tout it for a period of big breakout trading.
Our advice is to look for long-bias trades in this stock.
This is based on a prediction that it will break out well above the near-term overhead resistance quoted levels at between $4.25 and $4.50 per share, with a high volume, of course.
Watch the charts and keep an eye out for a sustained close or move above those levels we’ve outlined with a volume that hits near or preferably above the 90-day average of 229,159 shares auctioned.
Should the breakout develop, as many have predicted, the stock will be set up to re-test or maybe even take out the proceeding overhead resistance level at a solid $5 to a 20-day average of $5.23 per share.
If there is a high-volume move that pops $5.23, then the stock will have a strong chance to make up for the previous losses earlier this month when it started at $7 per share.
Buying this stock off weakness in anticipation of this predicted breakout could be combined with using a stop that sits somewhere below the short-term support price of $4 per share or the year-low of a lesser $3.52 per share.
Or conversely, if one decides to buy off strength instead, once it starts to trend above breakout levels and the furor begins, simply use a stop mechanism that sits comfortably above your entry point figure.
Moving away from pharmaceuticals (yes, there are other things to buy!), we come to our sports goods retailer that is spiking currently, Sportsman’s Warehouse.
This company offers various products in a store format that has an average of 11,000 square feet.
The Decathlon of the USA.
The spiking has been such that many see it as within range to trigger the near-term breakout trading event.
Heavy selling pressure has been imposed upon it over the last several months by nervy investors, which has subsequently sent the share price tumbling by a significant 37.5%.
One thing that is immediately obvious from the chart is that it has also, recently performed a double bottom chart trend, when shares found buying interest at between $7.77 and $7.71 per share over the last 30 days.
Uptrending has taken over recently, with the 20-day average of $8.09 per share being overshone by its recent performance, following the potential bottom of around $7.70.
These recent trends have seen many traders predicting a near-term, approaching breakout trade in above key overheads.
Advice is to look for long-bias trades in this stock.
This advice is based on a prediction that there will be a very rapid breakout above the near-term overhead levels in the region of between $8.26 and $8.55 per share, and then further moves to $8.75 and even $9 per share with some high volume.
Keep an eye out for sustained moves above aforementioned levels with volumes hitting above or near the 90-day averages of around 625k shares traded.
Should the breakout predicted kick off sometime soon, the stock could re-test or even take out the major overhead resistance at the 50-day moving average, at $9.47 to $10.17 or perhaps even higher: $10.50 to even $11 a share.
Buying off weakness in anticipation of the upcoming breakout can be combined with using a stop that sits comfortable around the double bottom levels.
Also advised, could be to buy off strength once the breakout levels are taken out with volume and then use a stop that sits a nice, comfy percentage from the initial entry point of transaction.
Not your typical company to be the target for investment strategies in stocks, Tuesday Morning is a retailer of quite upscale home accessories, homeware goods, seasonal goods and gifts in the U.S.
Bulls have been licking their lips with regards to this one, with shares moving higher by 7.1% during the last two quarters.
A glance at this chart for the company shows is has seen sideways consolidation and trending over the last 60 days.
Shares have moved between $6.15 on the lower side, and at $7.25 on the higher side.
Stock has started to trend, recently at least, back above the 200-day average of $6.70 per share and average during the most recent tenth of that period of a slightly higher price of $6.81 per share.
This is a trend that is pushing shares of TM within what many deem a range capable of triggering near-term breakout trading above the upper limit of its horizontal trading pattern mentioned a second ago.
Advice to investors and traders:
- Look for long-bias trading in TM, should it manage to break above the short-term resistance levels at around $7 to $7 and three cents extra.
- Repeat the same if TM manages to head above the 50-day average of $7.11 per share and over further resistance levels to a higher price of between $7.13 and $7.25 per share, with a high volume of course.
- Keep an eye out for sustained moves or closes above these levels with volumes that equal or surpass the average 90-day moving action total of 361,730 shares.
- Should the predicted breakout spark soon, the stock will rise to a very strong $8 or $8.75, with the upper limit currently touted as a very strong $9.20 per share.
Regarding buying off weakness and off strength:
- Buying off weakness will work well in anticipation of the breakout if a stop that sits above the 200-day average we mentioned earlier is used, the price of $6.69 per share, or perhaps even the key support levels that are lower, around $6.22 to $6.15 for each share.
- Buying off strength could be done once it starts to move above-said breakout levels, by using a stop sitting somewhere comfortably above your percentage at entry.
Here’s Why The ‘Cockroach Portfolio’ Is Gaining Popularity
Ray Dalio, the founder of Bridgewater Capital, calls it the “all-weather portfolio” and it’s helped his investment management firm amass roughly $140 billion in assets.
Former Libertarian presidential candidate Harry Browne called it his “fail-safe investing” portfolio. Additionally, It just had its best three-month return ever. It returned 18%, far exceeding its average annual return of 7%.
Browne’s investing philosophy was that when times are good, stocks do well. Meanwhile, bad times are good for Treasury bonds, and gold does well during stagflation. Also, cash is king during a recession or crisis.
Since we don’t know what the future holds, Browne advocated for putting 25% of your portfolio into each asset class. He also suggests being prepared for whatever comes. With bonds, gold, and Treasury’s in your portfolio, you’ll underperform during a bull market. However, you can more than make up for it by softening the blow during a down market.
The “Cockroach” Portfolio
Back in 2012, Dylan Grice, a former strategist with SG Securities, called that type “the cockroach” portfolio. He dubbed it as such due to its ability to survive anything thrown at it.
“What I like best about cockroaches,” wrote Grice, “isn’t just their physical hardiness, it’s the simple algorithm they use to survive. According to Richard Bookstaber, that algorithm is ‘singularly simple and seemingly suboptimal: it moves in the opposite direction of gusts of wind that might signal an approaching predator.’ And that’s it. Simple, suboptimal, but spectacularly robust.”
Grice has calculated that for long-term investors, this type of portfolio has done at least as well as the traditional 60/40 stock and bond mix since the early 1970s. But most importantly, it managed to avoid any massive drawdowns.
And just like cockroaches, your first job is surviving as an investor, says Groce, while prospering is job number two.
A Similar Approach
Fortunately for investors who are looking for this type of portfolio, an ETF has recently launched that follows the same approach as the “cockroach” portfolio.
It’s called The Advanced Research Investment Solutions Risk Parity ETF (RPAR) and was launched last November. Alex Shahidi, the managing partner and co-chief investment officer, says they’re up to $620 million in assets so far.
He says the ETF has returned 12% so far this year compared to 1% for the S&P 500.
Most importantly, during the crash in March it fell just 15%, less than half of the drop in the S&P 500.
According to Shahidi, the fund is 25% stocks, 15% industrial commodities, 17.5% gold, 20% long-dated Treasury inflation-protected securities and 42% long-term Treasury bonds. Total exposure to the market is 120%, because the fund is 20% leveraged.
The stock mix is half U.S. and half overseas stocks, with the overseas portion tilted toward high volatility emerging markets.
Nobody knows what the market will do next, so Shahidi says you want to be prepared for any outcome. “You want to be diversified to (different) economic environments,” he added.
He did say that “If I had to pick an asset class for the next 10 years, it would be gold.”
How To Buy Gold For Your Investment Portfolio – Part 2
Yesterday was part one of buying gold and silver coins for your investment portfolio. With gold and silver both on a hot streak, investors are looking for the fastest way to gain exposure to and buy precious metals. You must be prudent and exercise caution so you don’t make a mistake and find yourself with a bad investment.
Do: Buy Gold With Your Savings
Don’t borrow money to buy gold. Use your savings so when you take possession of your gold, it’s yours without any claims against it. With volatile gold prices, you don’t want to be paying back a loan on your gold if the price suddenly dips.
Don’t: Buy Gold With Credit
The current financial system is built on fiat currency and debt with dollars being printed out of thin air. The reason to own gold is the opposite of that. So to purchase gold by using the system it is protecting against defeats the purpose of owning gold. Just use your savings and own your gold outright from day one.
Do: Store Coin Nearby
If a crisis hits and you need access to your gold, you don’t want to be out in public trying to retrieve your gold. So whether it’s in a small safe hidden in your house or buried in your yard, keep your gold nearby for easy access.
Don’t: Store Coins In a Safety Deposit Box
Storing your gold at a bank sounds like a safe decision. But it’s a bad idea for a few reasons. The first is that if there were ever a crisis, you have to go to the bank to retrieve your gold. That assumes the banks will be open during a crisis. Then you have to get access to your safety deposit box, retrieve your coins and safely get them home. That’s a lot of things that need to go right during a crisis. Additionally, gold has been confiscated before. Here in the US, gold was confiscated in 1933 under Franklin Roosevelt. If it were to happen again, gold stored at home, where there is no record if it, is much safer.
Do: Only Invest With Money You Don’t Need For Awhile
Nobody knows when inflation will hit, or the dollar will collapse, or when gold prices will finally take off. But we aren’t trying to time any of those occurrences. The reason to own gold is a long term store of value. So you don’t want to speculate in gold. We could see prices move higher or significantly lower. But long term, history has shown that gold prices steadily march higher as the dollar steadily declines in value. So when buying gold, make sure it’s with money that you don’t need in an emergency. We suggest using savings or other funds that you don’t need to worry about getting access to for at least five years.
If you have any more questions about investing in gold, find a reputable gold coin dealer near you. They will be glad to answer questions.
Tech Companies Report Record Earnings, See $200 Billion Added To Market Cap
A day after their CEO’s spent five-and-a-half-hour-long testifying at a congressional hearing on anticompetitive practices, four of the largest tech companies in the world grew even larger after each reported strong earnings in the second quarter.
Yesterday alone, Apple, Amazon, Alphabet (Google’s parent company) and Facebook added about $200 billion to their cumulative market cap after they announced earnings. This shows just how dominant each business is. Combined the companies are now valued at more than $5 trillion.
Apple reported more than $11 billion in earnings despite shutting down most of their retail stores during the pandemic. On the earnings call the tech company reported strong demand for the smaller, lower-cost iPhone 11. It also reported a surge in sales for the iPad and Mac products.
“Mac and iPad, these are productivity tools that people are using to stay engaged with their work or stay engaged with their schoolwork,” Apple Chief Executive Tim Cook said during the call. “And we believe we’re going to have a strong back-to-school season sitting here today, it certainly looks like that.”
The company also surprised analysts during the call by announcing a 4-for-1 stock split. Investors who currently have shares will receive three additional shares for every one they own. The share price is also adjusted down to roughly 25% of the current price, helping to make shares more affordable.
Tens of millions of Americans stuck at home during the shelter-at-home restrictions. With this, Amazon was perhaps the biggest winner and reported a record net income last quarter. On the earnings call, Chief Financial Officer Brian Olsavsky said that online grocery sales had tripled in the quarter and video streaming had doubled from a year ago. The company also saw an increase in its cloud computing business.
Alphabet reported earnings and net income in line with expectations. However, it announced the tech company’s first-ever drop in revenue for display ads on Google.
“The macroeconomic environment costs by the pandemic created headwinds for our business,” Alphabet CEO Sundar Pichai said on the call, but said that indications in the third quarter are a stabilization in users and expectations are for revenue to return as well. “This was true across most of our advertising verticals and geographies. Of course, the economic climate remains fragile.”
Facebook, though, had the biggest after-hours jump in its stock price after it beat Wall Street expectations by topping $5 billion in quarterly profit. Also, Facebook said that its traffic grew during the pandemic, with more people at home online, but that the average price per ad declined due to the economic fallout of COVID-19.
“Facebook has been a lifeline of economic activity,” said Chief Financial Officer David Wehner on the earnings call. Also, the company announced $5 billion in quarterly profit.
It said that with more people at home all day due to the pandemic site traffic grew, but like Alphabet, saw a decrease in the average price per ad due to the economic fallout of COVID-19.
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