Winning Trades Based on Analyst Ratings for June 21
Fifteen stocks were subjected to new analyst sentiment this morning. Twelve had new bullish ratings, whether they were upgraded to or initiations with an Outperform, Overweight or Buy rating. Three others were initiations with or downgraded to bearish ratings such as Sell, Underweight or Underperform.
Below are the ratings that caused the biggest moves on the respective equities:
Deutsche Bank on Onyx Pharmaceuticals
You did not need to have be a star trader to know Onyx Pharmaceuticals (NASDAQ: ONXX) was going to move today after favorable panel findings on the candidate drug Kyprolis. But if you follow new ratings, ONXX would have popped out due to a slew of favorable ratings. Deutsche Bank's initiation of shares with a Buy rating was reported by Benzinga Professional at 5:41 AM. At that time, shares had already posted much of the 40-something percent rise from yesterday's close (trading at $55 a share versus the $44.26 close). The first ONXX trade of the day at 9:30 AM was at 61.38. By 12:42 PM, shares had reached an intraday high of 4.9 percent. Read the preview to that initial headline with analyst color here.
Bank of America on Chimera Investment
Benzinga Professional reported at 6:19 AM that Bank of America had downgraded Chimera Investments (NYSE: CIM) from Neutral to Underperform and reduced its price objective from $2.80 to $2.50. Shares opened at $2.70 and are trading at a low of 2.51, very close to the new price objective from Bank of America at the time of this writing, indicating a 7 percent decrease. You can read a follow-up with analyst color to that initial call here.
Trading The Calls
The tone of the markets was very bearish today. Of the twelve bullish-call stocks, eight experienced a fall in market price almost immediately and have recovered little on the day, so the directions were not too predictive of moves. On the other hand, all three bearish calls predicted the moves correctly.
Traders going long (buying shares) on today's bullish calls and going short (selling shares) where calls were bearish would have been up $1,225 (1.64 percent). We assume, as before, a $5,000 maximum position on each equity issue traded. This profit assumes good P/L timing and exits at highs - the most optimistic scenario, one that requires very forgiving trail stops.
For a dose of reality, had traders held on until the time of this writing, they'd be sitting on a loss of $750 (1.07 percent). Total capital needed to trade all of today's ratings was just under $75,000.
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