Everywhere you turn, you see stories and videos about another Ebola outbreak. Major epidemics like the Ebola virus often create trends in healthcare, which can lead to major opportunities for investors.
Here is one stock that has been off the radar for most Wall Street firms, but is my favorite Ebola-related stock right now.
On July 30th of this year, this stock flashed a buy signal based on our Trade Triangle Technology - that was two and a half months ago! Do you remember seeing or reading about Ebola two and a half months ago? I expect not, as the Ebola virus was not front page news like it is now.
Chimerix To The Rescue
The chart below perfectly illustrates the upward trend of this stock. The green monthly Trade Triangle on the chart is where we were first alerted to the beginning of a bull trend for Chimerix, Inc. (NASDAQ:CMRX) on July 30th at $27.32.
Chimerix, Inc. (NASDAQ:CMRX) could have a great deal more room to go on the upside as a result of the Ebola pandemic. I do expect to see volatility in CMRX increase as it climbs a "wall of worry" from current levels. The more news that comes out about the spread or containment of the Ebola virus, the more volatility we could see. Overall, I do believe the trend for CMRX is on the upside and will remain that way for quite sometime. Always protect your capital with solid money management stops.
How Ebola Could Affect Stocks Negatively
Ebola could be a major problem for the travel industry, as international and even domestic holiday plans are curtailed by fear alone.
Delta Air Lines, Inc. (NYSE:DAL): Perception is everything. If the general perception is that people are in cancelling trips, then I see Delta having real problems. The technical picture for Delta looks weak in my eyes. The potential for a move down to the $30 or even $25 a share level is very real.
JetBlue Airways Corporation (NASDAQ:JBLU): Like Delta, the technical picture for this stock is not as rosy as other stocks. If you're in this stock, I would recommend moving to the sidelines. If you are not in this stock and an aggressive trader, you could short the stock, looking for a move down to the $7-$8 level.
I am not a fundamentalist, but this stock could be driven higher by three core elements, perception, technicals, and the spread of Ebola. I have shared with you the technical picture for CMRX, perception and predicting the spread of Ebola will be reflected in the stock settlement each night.
MarketClub's Trade Triangles alerted to a change in trend for CMRX over two months ago, but you can use MarketClub's scanning tools to find opportunities like this everyday.
You can find stocks that have had a major long-term trend change by simply using the filters in our Trade Triangle scan. Like Chimerix, Inc. (NASDAQ:CMRX), these stocks can have strong technical support which fosters continued movement. This scan is very easy to use and can help you find new markets many months before the fundamentals bring them to light for other traders!
Stay well, stay strong and every success in the future,