The so-called January Effect offers an opportunity to potentially make about 30% in three months in the stock market. The January Effect is a phenomenon that makes prices of certain stocks rise more than indices do.
In the past 30 years, we have made money from the January Effect about 75% of the time, broken even about 10% of the time, and lost money about 15% of the time.
For 2017, The Arora Report has published a list of 32 stocks, complete with “buy” zones and recommended position sizes to profit from the January Effect. Let us illustrate this with an example of hospital operator Community Health Systems CYH, Community Health is on the list.
Please click here for an annotated chart of CYH.
The chart shows the buy zone, the stop zone and the target zone.
Only 18 months ago, Community Health Systems was trading around $54; now it’s about 10% of that price. The company suffered due to mismanagement, but that is now being rectified. At this depressed price, Community Health Systems is a potential buyout target of HCA Holdings HCA, and Tenet Healthcare Corp. THC.
Hospitals are under pressure due to Donald Trump’s plan to repeal Obamacare. That can quickly change, however, since Obamacare will be repealed but not replaced immediately.
A buyout rumor, a good earnings report or a tweet by Trump could easily send the stock to the target zone. With 26.7% of the shares outstanding sold short (meaning investors are betting the stock will fall), a so-called short squeeze is another potential avenue for Community Health Systems to reach its target zone….Read more at MarketWatch
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