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A Big Winner For Elite Option Trader Subscribers


The Dynamic Wealth Report
September 25, 2009

How To Turn A 51% Gain Into A 343% Windfall
by Corey Williams, Editor

Ever since I was young, I’ve been a bit of a thrill-seeker.  Over the years, I’ve scratched my thrill-seeking itch by riding ATVs, roller coasters, bungee jumping, and a number of other exhilarating activities.

But for me, there’s no bigger thrill than seeing an investment double, triple, or even quadruple!

It never gets old… I get the same feeling today as when I locked in my first big win (all those years ago).

I’m not going to lie and say every trade’s a winner.  But, the ones that deliver huge gains are that much sweeter.  The secret to big winners is to cut the losers short, and let the winners run.

As editor of Elite Option Trader, I spend a lot of time looking for explosive short-term trades.  The kind of trade that turns small stock price moves into double-digit winners… And big price swings into small fortunes.

That’s why we use options.

Options are able to deliver massive winners time and time again without using margin and with limited risk.  You’ll never lose more than your initial investment.  And you’ll never get a margin call.

To be honest, we keep a tight lid on our trades in the paid services.  It simply isn’t fair to paying subscribers if we’re giving out the same information here for free.  But I got the ‘ok’ from the boss to share a recent trade with you.

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Here’s how our subscribers turned a 343% profit.

On July 14th, a stock we had been watching looked like it was primed for a rally.  (And boy, were we right.)

The stock we were watching was Pegasystems (PEGA).  They’re a software company specializing in automating business decisions.  There business doesn’t sound to exciting but their earnings and revenue growth rates sure are.

In the last year, revenue grew 30% and EPS jumped 95%.  And in the previous quarter, their EPS skyrocketed 192%.  Explosive growth rates like these are just the first step.

After we’ve identified a stock with great fundamental potential, it’s time to get technical.  That means we’re using technical analysis to pinpoint the best time to buy.

For PEGA, the time to buy came once the stock price had pulled back to support.  Take a look at the chart below.  You’ll see the horizontal support line between $22 and $23.

PEGA Chart

The new support was established with the stock gapping higher in early May.  That’s the last time they announced earnings... Clearly the market liked the results.

After a quick check of our numbers, we emailed a trade alert to our subscribers.

We said, “Buy the PEGA December 2009 $25 Calls.”  At the time, the stock was trading for $23.15 and the options were trading for $2.33. What happened next has been a thrill ride for everyone.

The stock started climbing and climbing.  Just a few days ago, the stock hit an all-time high of $35.  That’s a 51% gain in the stock.  (Not bad.)

But we did better than that!

The options we recommended rocketed from $2.33 to $10.30!  A whopping 343% gain!  That’s good enough to turn every $5,000 into $17,150.

Some of our subscribers have already booked big profits.  However, the best part is the ride isn’t over yet.  Aggressive traders have until December 18th to let this winner run.  That’s when the option expires.

Before the option expires, there’s another earnings announcement.  The last few quarterly reports have provided some serious fireworks.  Back in May, the stock jumped 45% and in August the stock jumped by 10%.

If history is any indication of what the future holds, we could be sitting on a ‘10 bagger’.  That’s a 1,000% gainer.  I don’t know of another investment capable of generating these kinds of returns (and thrills).

Congratulations to all of our readers who banked a very nice payday with this option!  If you’ve never ventured into options and want to put them to work for you, I encourage you to take a look at Elite Option Trader. Click here for details…


Notable Rating Changes 

• STEC (STEC) was upgraded by B. Riley & Co this week.  They now have a buy rating on the stock.  The stock has pulled back from its highs on fears of increased competition.

Research In Motion (RIMM) was downgraded to a sell rating by Deutsche Securities.  RIMM missed profit estimates for its 2nd quarter yesterday.

• William Blair started coverage on American Express (AXP) this week with an outperform rating.  The credit card company is navigating the recession beautifully.


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Issue Date:
 Friday, September 25, 2009


Notable Highs and Lows

•  Cintas (CTAS) hit a 52-week high of over $30.  The business services company recently beat Wall Street Q1 estimates.  Their market cap is now over $4.6 billion.

•  First Financial Northwest (FFNW) hit a new 52-week low of just under $6.  The community bank is facing pressure from rising loan defaults. They have a market cap of just over $100 million.

•  Zhongpin (HOGS) hit a 52-week high of just over $15.  The Chinese meat packer received a $13.8 million subsidy from the government.  Their market cap is now over $400 million.


Quote of the Day

"An oppressive government is more to be feared than a tiger."

                                    -
Confucius

 
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This Week's Winners

Company Gain
Beard (BRCO) 138%
Engex (EGX) 124%
Perot Systems (PER) 65%
China Auto Logistics (CALI) 44%
Intersections (INTX) 44%
*Week-to-Date, Stock Price > $5


This Week's Losers


Company Loss
United Tenn. Bnkshs (UNTN) 47%
Ardepro (AEPRF) 30%
Lime Energy (LIME) 29%
TOMI Environmental (TOMZ) 28%
FSB Comm. Bankshs (FSBC) 24%
*Week-to-Date, Stock Price > $5


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