I love hated stocks.
I’m talking about the ugly stocks that get bashed on TV every day by slick Wall Street analysts.
These names are deeply unloved by the markets, and as a result… they’re dirt cheap.
Most of my biggest wins in the market over the years have been booked on these very stocks.
Right now, hated stocks are SOARING.
And recovery rally in hated stocks is just getting started. You’ve got a shot at HUGE gains on these discounted shares — in short order.
Here’s how you do it…
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So…
Before we get into the “how,” here’s the WHY behind hated stock rallies.
As bad news comes out about a company, stocks fall as long investors sell their shares and short sellers (investors betting on a stock to drop) pile on.
In general, stocks often fall as short interest — the number of short sellers versus a company’s available shares — rises.
But…
Once all the bad news has been priced into a stock, and there are no more sellers… these stocks can rally sharply higher on the slightest hint of good news.
To me, these are the most favorable stocks from a reward to risk perspective.
When stock market volatility is high — like we saw late last year, hated stocks plummet.
And it can get ugly!
But when stocks rally like they’re doing right now… the short sellers get squeezed and buy back shares in droves to cover their losing bets.
These “short squeezes” send shares soaring like a rocket, making traders rich quick.
If you’re a reader of my Vertical Fortunes or 42-Day Retirement Plan trading letters, you know this strategy well!
We just booked a slew of gains on short squeeze rallies.
Each of these stocks was loaded with short sellers, and on this earnings season’s solid reports… shares surged… and we profited.
If you were one of these folks, congratulations!
If you weren’t… keep reading!
Here’s your chance to cash in on the hated stock rally…
The Social Media Stock Rally NO ONE Wanted
Facebook Inc. (FB) is one of Wall Street’s most unloved stocks.
The company is under investigation for user data privacy concerns in several countries around the world, including the U.S.
It’s dealing with slowing user growth.
And the company has spent billions over the last few years to weed out fake news.
Sure they’ve made some mistakes with data, but the company knows how to make money in all markets.
The stock soared on a blow-out earnings report last week. Facebook reported a whopping 30% year-over-year rise in quarterly revenue — despite all its troubles
Since the start of the year, the stock is up 26%, compared to an 8% rise in the S&P 500
There’s a lot more upside where that came from, too…
The stock has traded in a tight range between $125 and $150. And the breakout targets $175.
From there, the stock could easily make a run at its previous all-time high just below $220
This is a hated stock you should LOVE right now.
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The other hated stock poised to pop for you is General Electric Co. (GE).
There are few stocks more hated than GE.
It’s one of America’s oldest and well-known industrial companies. But it has ballooned over the years into a conglomerate that does too many things… and doesn’t do all of them well.
As a result, this company has been a short-seller favorite.
In fact, GE currently holds the third spot on the list of biggest short positions on the New York Stock Exchange.
Over the last two years alone, shares shed 80% of their value from a high around $33 to a low just above $6 last December.
Fortunately, GE still generates more than $120 billion a year in sales — so there’s still plenty of value left in this old dog.
Like Facebook, General Electric reported earnings last week. And although it missed analyst earnings estimates, the company beat on top line sales.
On the news, the stock surged 10%.
I’ve been watching this stock for a long time, positioning for a turnaround.
And now, it’s here!
The GE shorts have been crushed so far in 2019…
Since the beginning of January, shares have surged 35% — more than four times the rise of the S&P in that time.
Trading at just 12 times forward earnings, GE is still one of the market’s biggest bargains — even after its big rally.
If you want to ride the shares higher, consider buying shares of the blue-chip industrial company or even trading options to magnify your profit potential.
In summary, the recovery rally in the market’s hated stocks isn’t a fluke…
And if you want to cash in the biggest move higher, look at the market’s most unloved stocks like Facebook and GE first.