On September 30th, I made a few predictions on this website in my article Short GoPro, Long Michael Kors. I’m going to review them in this article. Since this is a new website, I have been personally trying to figure out what content that I would provide. I think it makes sense for me to give short-term trades and opinions on the stock market as well as articles on topics that would interest millenials. In the articles where I give trading advice I will be going over my last picks and giving new picks in every new article. I think that these short-term articles will complement my long-term predictions on seeking alpha. Let’s get started!
I basically made 3 predictions 2 weeks ago. They were the following: Michael Kors stock would go up, GoPro would go down, and the Russell 2000 would increase. The trades were to short GoPro and buy Michael Kors. The results have been spectacular for my first trading recommendations that I have made on this website. My prediction for the Russell 2000 was wrong, but this would not have hurt you if you followed my advice. KORS stock is up about 1% since my recommendation. GPRO is down 19% since I recommended shorting it! My long-term perspectives on these companies have not changed from last week, so if you are an investor that looks to own positions for more than one year I wouldn’t sell KORS or cover GPRO. Since this series of articles will be for the short-term trader, I would recommend closing out both positions and putting your cash to work in my next 2 picks.
This series of articles will have 2 picks in each of them. Since the market is very oversold I am going to recommend buying 2 stocks. The two stocks are U.S. Silica (SLCA) and RCI Hospitality (RICK). I recommended U.S. Silica for the long-term in this article. I recommended RCI Hospitality in this article.
U.S. Silica is a company that mines frac sand. This frac sand is very pressure resistant. It is mixed with water and blasted at the rock that contains oil and gas. This fractures the rock and allows the oil and gas to flow out of it. The demand for this frac sand is skyrocketing. It is expected to triple in the next 5 years. This is the long-term reason why I like the stock. The short-term reason why I am recommending it lies in a similar type of analysis that I did in my last article in this series. The StockTa website has the 14 day RSI at 17.19 and has it in the buried category. The only negative that the company’s stock has faced recently is the fact that oil prices are down substantially. This is not a catastrophic thing because most shale wells are profitable with oil in the $70 dollar range. With oil still at $85, this is not a big issue. The stock has been trading based on the technicals; they are what has cause the stock to go from the low 70s to the low 40s. The stock experienced a clear double top in September; this has been driving the negativity in the price action. The company will be reporting earnings on October 29th. With likely solid results going to be reported, there is no way that this negativity can continue. I am sticking my neck out and recommending that you catch a falling knife and buy the stock.
RCI Hospitality is a company that operates strip clubs and restaurants. The trade is simple. I am bullish on the stock in the short-term because it reported a positive announcement last week and was forced down because the market has performed terribly. It reported same store sales that were the best in the entire fiscal year; they were up 6.8%. The stock has sold off after this news only because the market has been going down. The RSI is oversold; it is at 29.99. Once the stock market has at least a neutral performance, this stock will increase at least 5% in the next 2 weeks to make up for this underperformance.
Hopefully my results are as good as they were 2 weeks ago! Good Luck! Thanks for reading!