The Two Best Stocks To Trade Right Now

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I hope everyone had a fabulous, restful holiday - and I hope everyone's ready to start 2022 by ringing the register. We're going to take a slightly different tack today in the stocks we're looking at.

Normally, we look under the radar for big profits, but sometimes there are big profits to be had by looking at stocks that are in the news, but making unexpected trades no one else is looking at. The two stocks I'm thinking of are a biotech with a breakthrough Alzheimer's drug and a U.S. semiconductor firm.

Both of these stocks have been in the news lately, and lots of eyeballs are watching them, but I'm betting very few of those folks are making these moves - Now let's lay out the tickers and trades.

The Smart Way to Double Your Stake with Two "Hot" Stocks

Last week, a story broke in The Korea Economic Daily that Samsung Group is in discussions to purchase Biogen Inc. (BIIB) for more than $42 billion. The news sent BIIB shares soaring 12.52% in Wednesday's trading. By Thursday morning, though, shares dropped more than 6% after Samsung Biologics (207940.KS) called a media report that it was about to buy the U.S. company "not true."

The thing is, it doesn't really matter what's happening between Biogen and Samsung. Maybe Samsung is buying Biogen and the denial is a coy smokescreen. Maybe the story is "not true." Either way, it doesn't matter. What does matter is that the recent volatility is creating an interesting trade setup.

After pulling back as much as 52.98% from June 7, 2021, to Dec. 3, 2021, shares of BIIB looked like they were finally forming a base between $230 and $240 before Wednesday's news. If additional news stories lend credibility to Wednesday's Samsung acquisition rumor, shares of BIIB will likely jump back up to $260 or more.

If that doesn't happen, well, the stock was already forming a convincing base, and we could see a move higher, anyway. Biogen's new Aduhelm (aducanumab) Alzheimer's treatment is controversial, for reasons we won't get into here, but it has real "blockbuster" potential that hasn't been priced in yet.

So here's what to do: If shares of BIIB pull back to $230 by Jan. 14, 2022, I like buying the BIIB April 14, 2022 $230 call and the BIIB April 14, 2022 $235 call - a call spread - for $2.25 or less. I plan on exiting the BIIB call spread for a 100% profit or if shares of Biogen close below $220.

Next up, I'm watching Micron Technology Inc. (MU). On Thursday morning, shares of the Boise, Idaho-based semiconductor manufacturer lost nearly 3% in early trading after the company warned a day earlier that strict COVID-19 curbs in the Chinese city of Xi'an could disrupt its chip manufacturing unit in the area.

In a statement, the company said it is working with local government officials to identify solutions that will enable it to minimize the impact of the situation, and that it is tapping its global supply chain, "including our subcontractor partners, to help service our customers for these DRAM products."

At the end of the day, disruptions in the global supply chain have meant demand for the company's DRAM chips is very high. Any slowdown in production will likely only increase demand. And as they taught us in Capitalism 101, higher demand usually means higher prices. In the long run, that's good news for Micron, and it's creating a good trade set up.

If shares of MU pull back to $91 by Jan. 14, 2022, I like buying another call spread, of MU April 14, 2022 $92.5 calls and MU April 14, 2022 $95 calls for $1.10 or less. I plan on exiting the trade for a 100% profit or of shares of MU close below $87.35.

Disclosure: None.

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