John Lansing

Triple Your Money in These Trades

by John Lansing   10/12/09

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If you read the article on I wrote on shipping stocks in mid-September, you know I'm bullish on this sector.

In that article I recommended three trades: the DRYS Dec 8 Calls (OOCLH), the DRYS Jan 9 Calls (OOCAI) and the EXM March 8 Calls (EKNCH), saying the first two should bag you a triple, while the last one should at least double your money. These calls haven't made those big moves yet, so there's still time for you to jump on the boat.

Shipping Stocks Ready to Break Out

As I mentioned last time, the Baltic Dry Index (BDI) tracks worldwide international shipping prices of various dry bulk cargoes, and is a gauge of global supply and demand for these commodities. The steady rise in the BDI we've witnessed lately is seen by many as a key indicator of an increasing world commodity trade.

More importantly to us, though, the BDI is considered to be a sort of industry thermometer, and a leading indicator as to the behavior of stocks in this sector.

After experiencing a decline, the BDI is now going approaching the highs of two months ago, and I believe we are about to witness a parabolic rally

The BDI has seen some milestone developments in the past two weeks. It is up almost 25% since the time I wrote the last article, and it has risen the past 11 trading days in a row. And the index is attempting to break out of a bullish continuation falling wedge pattern.

Like I said, the BDI is a great leading indicator for shipping stocks. With the index poised to break out, we could also see explosive moves in individual stocks.

The stocks in this sector now have the momentum to make the wild 10% intraday moves up like they did earlier in the year when the BDI showed the same chart pattern that it is displaying now.

See full-size image.

Those people who position themselves for this rally stand to make enormous profits. In fact, the opportunity in front of you now would be like jumping in a time machine, going back three weeks and buying gold when it was $100 cheaper.

Time to Double Down

The three call options I recommended in my last article are still great buys that hold the potential to double or triple your money.

The DRYS Dec 8 Calls (OOCLH), currently trading at 55 cents, should at least triple from current levels. With huge block trades that came in on the 80-cent ask, it looks like the big boys are loading up on these options on the sly.

The DRYS Jan 9 Calls (OOCAI) are also trading for 55 cents, and they, too, offer you the opportunity to score a triple or better. Institutional investors are getting positioned for a big move in these call options, as well.

The EXM March 8 Calls (EKNCH), which are trading for $1.05, should double from current levels. The smart money is also positioning themselves in these calls.

Don't miss out on the huge move coming in these stocks. If you haven't already taken a position, hurry and do so. And if you have, I think it's time to double down.   

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The old ways of investing don't work anymore. But trading options founded on scientific principle can and does work in volatile times like these.

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