The market might be crashing left and right … but coronavirus stocks and sectors are on FIRE.
My top students and I are making record profits thanks to the crazy volatility in the market** … It’s not because we’re smarter or have some secret market trick.
It’s because we know how to adapt to the market.
You’ve gotta be nimble and react to what the market’s giving you right now. Don’t try to anticipate what could happen. Don’t try to guess when the market’s gonna bottom out.
No one knows.
So many idiot traders and newbies are getting decimated in the wake of this market crash. They just don’t know what they’re doing. But as I’ve been teaching my students for years, it’s possible to profit in any type of market condition. It’s all about being prepared and having the right strategy.
Are you ready to take advantage of the insane plays happening right now? First, get smart about which sectors are hot. Right now, it’s all about coronavirus stocks and sectors … But some might not be as obvious as you’d think.
Let’s talk about the smartest approach to the market right now and what kinds of coronavirus-related plays are heating up…
Table of Contents
- 1 The Current State of the Market
- 2 Coronavirus Stocks and Sectors
- 3 Virus-Specific Stocks
- 4 Quarantine-Lifestyle Stocks
- 5 Trading the Coronavirus: Tips and Tricks
- 6 Trading Challenge
- 7 The Final Word on Coronavirus Stocks and Sectors
The Current State of the Market
The financial news has been fast and furious for the last week or so. Some highlights?
- We recently officially entered bear market territory after a bull market that lasted over 10 years.
- Last Sunday, the Fed decided to cut rates … but the market didn’t react well. Read my thoughts on the coronavirus-related market crash here.
- According to CNN Business, March 16 was the U.S. stock market’s worst day since 1987’s Black Monday — and there’s no relief in sight.
For some traders, the answer is to short everything. But the market’s already down 30% off its highs. Shorting isn’t the smartest or safest play right now. It’s downright scary. Be smarter than the over-aggressive idiot shorts.
On a Personal Note
I’m sorry to say that my social media was hacked last week. You can read about it more in this post. Rest assured I’m back in control of it now.
But please remember…
I will NEVER contact you directly and ask for money or offer to place trades for you. There are scams everywhere. I’m relieved I was able to get the situation under control quickly. The whole ordeal was relatively short-lived.
If you’re ever contacted by someone who claims to be me, please contact my team and we’ll deal with the situation right away.
But back to the market. For a lot of people, it’s looking grim. But for smart traders, there are a TON of opportunities right now … For me and my top students, it’s been a wild ride with record profits.**
[**Note: success as a trader requires dedication and effort. Most traders — roughly 90% — lose money. These results are not typical. Do your due diligence and never risk more than you can afford to lose.]
How are my students and I finding these opportunities? By using a scanner.
For the record, I use StocksToTrade to scan for stocks. I’ve used it for years. People ask me how I find hot stocks … this is the tool I use. C’mon. This isn’t new information. Pay attention. (Full disclosure: I helped design it, and many of the scans fit my strategy to a tee.)
Once I run my scans, I follow what’s hot. And yeah, these days that’s coronavirus stocks. Duh, right? But they’re not all what you’d expect…
The most obvious coronavirus spikers are related to the actual virus. This includes companies that make products directly related to treatment or prevention. It could also be biotechs potentially working on a vaccine.
Here are a couple of the most recent hot virus stocks…
Decision Diagnostics Corp. (OTCPK: DECN)
This was a first green day OTC runner that had coronavirus test news. It was already up a lot. So I waited and bought a nice little dip off its highs hoping to sell into the close or the next morning.
Here’s the DECN chart from March 11 and 12:
I held overnight and in spite of the terrible market, it gapped up for a nice 27% win and a $1,350 profit.**
Several of my students played this one too, like Profit.ly user KCCremeens: “Yes Tim in at .069 out at .1202! Only 7500 shares but great wins!”
The first green day OTC pattern is one of my favorites right now. Check out this video to learn more about it…
iFresh Inc (NASDAQ: IFMK)
This is sort of a crossover coronavirus stock. On one hand, this is a grocery market chain and online grocery store.
On the other hand, it just announced an agreement to acquire 70% of Xiamen DL Medical Technology. Xiamen specializes in R&D of products like protective medical and non-medical masks.
I don’t really care about the company — what I do care about is its price action.
Check out the IFMK three-month chart:
Two weeks ago, this stock was trading around 70 cents per share. As of this writing, it’s trading in the low $2s. That made it worthy of a spot on my watchlist. I’d consider this a potential dip buy, ideally a morning panic — but I won’t chase it.
No Borders, Inc. (OTCMKTS: NBDR)
You know how I’m always saying I act like a retired trader? This was a perfect example of a trade good enough to drag me out of retirement.
I found out about NBDR thanks to my Trading Challenge student schultzy, who was using a news scan feature on StocksToTrade to find this incredible midday rocket. (Another example of why I LOVE our chat room.)
Take a look at the NBDR March 16 intraday chart:
These are just a few examples of recent coronavirus runners. See this post for more on hot coronavirus plays.
Sign up for my no-cost watchlist here to follow my latest picks.
Or as I call it … the “stuck at home” sector.
This is the less-obvious sector of coronavirus spikers. These stocks aren’t directly related to the actual virus but instead the lifestyle changes due to lockdowns and quarantines.
Suddenly, everyone’s working from home … or out of the job. There’s nowhere to go, and we’re supposed to keep socializing to a minimum. But we still have basic human needs…
We need food (and apparently stockpiles of toilet paper). And our demand for entertainment and comfort during this exceptional time is affecting stock prices.
There’s a definite mix of lifestyle and survival here. But there’s also a common denominator… These stocks are based on everyone being stuck at home for the foreseeable future.
Not all of these are low-priced stocks, so I wouldn’t necessarily trade them. But they can give you ideas about the types of stocks that are spiking right now.
Let’s check out some examples…
Blue Apron Holdings, Inc. (NYSE: APRN)
I’ve talked about red flags with meal-prep delivery service Blue Apron before. But back then, I had no idea that the coronavirus would have us all housebound.
On March 16, Blue Apron was holding steady in the low $2s … But as President Trump warned against gathering in groups of 10 or more … As more bars and restaurants closed … the stock surged.
It closed at $3.95 and opened the next day at $5.50. Then it just kept running.
Here’s the APRN 5-day chart:
It finally hit a high of $28.84 on March 19. SO many students crushed it on this stock. But the play of the day had to be by Jack Kellogg who locked in $20K on APRN. He finished the day up $23K — his best day ever.
$23k realized today, phew! Best day ever.
Super grateful. pic.twitter.com/3xtfAZpyVY
— Jack Kellogg (@Jackaroo_Trades) March 19, 2020
[**Please note these results are not typical. Jack has exceptional knowledge and skills he developed with time and dedication. Most traders lose money. Do your due diligence and never risk more than you can afford.]
Campbell’s Soup Company (NYSE: CPB)
Fear abounds in times of uncertainty. People are stocking up on essentials like toilet paper, water … yep, canned food too. Campbell’s Soup isn’t small by any means. But it’s experiencing a lot more volatility than you’d expect from a larger company right now.
If you look at the CPB chart, the growth is notable:
After holding steady in the $40s since June 2019, the stock started to climb as soon as the coronavirus started getting attention in early 2020. Now, it’s reaching new highs in the $50s.
Could it continue? I can’t answer that. Should you keep an eye on canned food companies? Can’t hurt.
Peloton (NASDAQ: PTON)
Turns out, a controversial commercial isn’t the only thing that can spike Peloton — millions of people being stuck inside their houses will do it too.
Active people who go to the gym and are always on the go are being forced to stay inside. And they’re going stir crazy. Stocks like PTON could go up along with increased interest in at-home fitness options.
At the start of the trading day on March 16, PTON was trading in the $18s. By the end of the day, it was trading at about $22. And it just kept going…
Check out the PTON five-day chart:
On March 18 PTON made it to the $27s. It could be a sign of a trend for at-home fitness-related stocks.
Waitr Holdings Inc. (NASDAQ: WTRH)
According to its Investor Relations page, this company’s core is a platform that lets people connect to restaurants in “underserved cities in America’s heartland.”
While the heartland might not be a hotspot where bigger services like GrubHub reign supreme, we just entered a pretty exceptional time. Most restaurants are moving to a takeout-only or delivery-only model. Suddenly, companies like this are in demand.
Here’s the WTRH chart from March 16:
I entered this stock at 42 cents. But when it didn’t spike as much as I wanted I got out at roughly 44 cents. A nice little profit. As I tend to do, I sold WAY too early — the stock shot up all afternoon and opened the next day at 93 cents.
That’s OK. I’m still happy with this trade because I didn’t get greedy. And it could be a potential re-buy on a dip. Oh, and it didn’t stop there…
Here’s the WTRH 5-day chart:
As you can see, on March 19 the stock hit $4.40 — more than 10 times the price when I alerted the chat room on March 16. That shows just how much these stocks can run. Even while the rest of the market gets crushed.
Here’s the final stock in this post. Like APRN, CPB, and PTON, this one isn’t a penny stock. But it’s worth noting as so many people’s lives have shifted to work from home…
Zoom Video Communications, Inc. (NASDAQ: ZM)
Remote workers of the world, unite! With everybody suddenly working from home, stocks like Zoom or Slack (NYSE: WORK) could experience massive growth.
In the case of Zoom, you can see an uptick in stock price as early as January, when the coronavirus hit the public eye. At the beginning of 2020, the stock was recovering from a downtrend in December and trading in the $60s.
Take a look at the ZM six-month chart:
By the end of January, it was in the $70s. By mid-February, it was in the $90s. In March, it reached a new high of $132.25.
As of this writing, it’s falling in price. But as more people get their bearings and start working from home, there could be further spikes. Stocks related to remote work could be big in the coming weeks and months.
Now that you’ve got some ideas about what’s hot in the current market, let’s talk tips about trading the coronavirus.
And please, watch this video on how to stay safe during the pandemic…
Look at Past Health Scares
I say this a lot: History repeats itself.
True, the coronavirus is unlike any other health scare we’ve had in the past. But certain patterns are repeating themselves fairly predictably. Some of the same stocks and sectors that spiked during Ebola and SARS scares are spiking again now.
Look at the past. You can learn a lot about the types of stocks that might spike in the face of the current coronavirus crisis. You can also learn a lot about past epidemics and their impact on the market.
Don’t assume the market will quickly bounce back. There are just too many factors we don’t know yet.
Remember: fear makes the market fickle and volatile. You can’t expect stocks to move in rational ways.
Just because a stock is in the coronavirus sector or a peripheral sector doesn’t mean it’ll spike. And if it does spike, it won’t last forever. So don’t chase. Wait for the right opportunities.
That’s a lesson that Profit.ly user therealmcdougal had to learn:
“Once again I learned a valuable lesson: I traded my entire account on Friday for a measly $20 gain (better than loss) on less than ideal setups, and because I have a cash account, I don’t have any $ to trade today. IT IS MY FAULT I’M MISSING ALL THESE BEAUTIFUL SPIKES THIS MORNING! I will continue to learn from my mistakes.”
Tough lesson … but I love that honesty and perspective.
Look for Sympathy Plays
Sympathy plays happen when companies spike due to an indirect catalyst. For example, if Blue Apron is spiking, that could cause other meal-prep delivery services to spike, simply by association.
So look for related companies that could benefit from spikes or good news around a sector leader. Check out my recent post on coronavirus sympathy plays for more on how to find them.
Finding opportunities in the market is all about your ability to adapt, your mindset, and how prepared you are.
Wanna be prepared for coronavirus plays? Invest in your education.
My Trading Challenge is designed to help traders learn to become smart, safe, and self-sufficient traders. It’s based on my 20+ years of experience as a trader.
I’ve learned a lot during my years in the market, and I share it all with my students — the good and the bad. I’m totally transparent. I share my personal rules for success and which brokers I use. Most importantly, I share every single trade publicly.
Not everyone’s accepted. I work hard as a teacher. It’s an insult to have students who think I’ll do the work for them and send them hot stock picks. It doesn’t work like that. You have to find what works for you.
To help you figure it out, the Challenge is loaded with resources like interactive webinars with me and my top students and over 6,300 video lessons. And you get access to an incredible chat room community.
I trade with a small account to teach my students the process. I’m also trading with a bigger account this year. (Read more about why I’m trading with two accounts in 2020 here.) Come learn with me. Become a self-sufficient trader in your own right. I love seeing my students succeed.
Recent Comments From the Trading Challenge Chat Room
Let’s just take a look at some of the recent comments from my Trading Challenge chat room on March 16.
7:37 AM Cydonia: Easy 300 off OPGN, immediately beat back down once it beat the 4 resistance.
8:51 AM KCremeens: sold 3k AYTU 1.35. Bought Friday before close for 1.00.
9:02 AM jmartinez390: Nice little gain from OPGN 2500 shares at 3.20 sold at 3.50.
9:58 AM Johann135: damn caught an awesome short on $DAL in at 32.60.
10:01 AM DamienL: made my first +100 trade on $OPK, a bit slow moving but i picked the exact bottom and sold at the exact top. 🙂
12:24 PM alii: Booooom out AYTU +1450! Roughly 3700 on the day!
10:27 AM RaYdAwG: $TGI short 400 shares at $8.60 covered $6.50 for 25% profit.
2:01 PM rrhyner2: PCTL in and out for the third time $454.
2:31 PM Jackaroo: covered $IBIO $1,150.
2:33 PM Omer_Rahamim: OPGN in 3.99 out 4.42.
3:33 PM papajohn: out of PCTL for $1,260 profit.
We’re living in uncertain times. The coronavirus has turned life as we know it upside down. The longest bull market ever is over — and the market is 30% off its highs.
But I want you to deprogram yourself from the traditional way of thinking about making money in the market. Nothing’s what we’d expect. Gold, oil, ETFs, bonds, blue-chip stocks … everything’s down.
But you can learn to trade through any market.
There will always be sectors and stocks that spike, even when the markets are down.
Right now, those trending sectors and stocks are all related to the coronavirus, either directly or indirectly. Are you prepared to find them and take advantage of them while they’re in play?
Be meticulous. Research and study the past. Always be on the lookout for what’s happening in the market right now — forget about what you think or hope will happen. React to what the market gives you … Don’t try to predict the future.
Be safe during the coronavirus crisis and be safe in this crazy market. Study up!
How are you handling this crazy market volatility? Leave a comment — I’d love to hear from all of you.