AI chip designer Nvidia has generated nearly $26 billion in revenues over the last twelve months. In 2021 and 2022, it did nearly $27 billion.
Pretty stable right?
On the other hand, shares of Nvidia have been all over the place…
They’ve gone from a low of $108.13 to $419.38 in the last 52 weeks.
Pretty dramatic…especially considering the size of NVDA, a company worth about $1 trillion.
While Nvidia’s core business has changed much over the last five years…the narrative has changed.
And that’s why paying attention to trends and catalysts is essential to becoming a successful day trader.
If you look at the top movers each day…I’m talking about the stocks that are up 100%, 150%, and 200%, like UCAR yesterday…you’ll find nearly all of them are catalyst driven.
And today, I’m going to show you what I believe is the EASIEST catalyst trade to master, how to find this trade, and how it led to some of the biggest wins in my career.
Table of Contents
Understanding Catalyst Trading
Catalyst trades are centered around specific events or news that have the potential to impact the price of a stock.
These events can be anything from
- Earnings releases
- FDA approvals
- Mergers and Acquisitions
- Company-specific news
- Geopolitical events
- Court rulings
- Industry-specific news
- Basically, any new information that has the potential to move the stock.
By closely monitoring and identifying these catalysts, traders can position themselves to ride the waves of market movements and secure substantial profits.
Understanding the power of catalyst trades opens up opportunities for traders seeking to maximize their gains.
Now that you’ve gotten a better feel for catalyst trading let’s take it a few steps further.
The Latest Trends and Catalysts That Are Working
Unless you are new to the markets, you probably know that the biggest catalysts are centered around AI.
And that’s been the case ever since ChatGPT launched, an AI platform with the record for being the quickest to reach one million users…just five days!
But hot trends come and go…
For example, the buzz was all about crypto, NFTs, and blockchain last year. It was “work from home” companies and EV stocks during the pandemic.
Sticking to a hot theme is where a lot of traders find opportunities.
But that isn’t always the case with me.
For example, AI, IDAI, MRAI, GFAI, CXAI, APLD, GSIT, VRSSF, and INOD are the top AI plays to watch…
But they are all terrifying to trade…
The choppiness makes it difficult for me to manage risk appropriately.
However, there’s a much better catalyst trade, in my opinion…and it’s called “The Legitimizer.”
The Legitimizer In The Wild
One of the hottest movers yesterday was the ticker symbol WLDS.
That’s because the company announced it was commencing commercial manufacturing of the Mudra band for the Apple watch.
So let’s break it down…
Just last week, WLDS was trading at $0.43…
By Thursday, it was trading as high as $2.36.
That’s good for a gain of 322% in one week!
WLDS has a market cap of $27.02 million which is tiny for a publicly traded company.
To put it in perspective, Apple CEO Tim Cook is set to make nearly $50 million in 2023.
The fact that this rinky-dink company can associate with a firm like Apple is super bullish.
In a way, it makes WLDS more credible and legitimate.
That’s why I call this type of catalyst the Legitimizer.
And I find it one of the easiest to play because it is so easy for people to understand.
Of course, these types of news headlines don’t occur daily…but they are with paying attention to…and jumping on…if you can catch them early.
How Legitimizer News Works
- Look for stocks that tie themselves to credible companies, celebrities, and government agencies.
- Whenever these tiny companies can tie themselves to more credible sources, there’s a good chance they can pump higher.
- The key is to be on top of the action early
It’s helped me make a ton of money in the past…and I believe it will in the future.