Today I want to talk about just one stock. . . though I've done what I'm about to describe with dozens.
The stock is JA Solar (NASDAQ: JASO), a Chinese solar stock — but the specific stock is really not important; you can do this with many different plays.
Over the course of the past 10 months, I've recommended and sold this particular stock eight times for profit. Seven of those times were for double digit gains.
I've done it using a special system I've devised. And you can do it, too.
Trading a Single Stock
The first time I traded JA Solar was last November. I most recently sold it this September. Here's how those trades worked out:
|
Date Bought
|
Date Sold
|
Percentage Gain
|
|
11/13/08
|
11/24/08
|
30.45%
|
|
12/01/08
|
12/31/08
|
43.91%
|
|
03/03/09
|
03/04/09
|
13.66%
|
|
03/05/09
|
03/09/09
|
9.89%
|
|
04/07/09
|
05/06/09
|
36.56%
|
|
05/08/09
|
05/27/09
|
10.13%
|
|
05/19/09
|
05/20/09
|
15.24%
|
|
08/17/09
|
09/24/09
|
16.67
|
Two of those trades were held for one day or less.
So, how have I done it?
First, I use that system I told you about, called the "R-Track." It's a strategy that takes into consideration (among other things), a database of cleantech companies, SEC filings, future earnings estimates, and forecast market growth for the respective sector.
In this case, I looked at forward earnings projections for JASO, but also for its peer group comprised of other Chinese solar stocks.
Then, I figured out where the group of stocks should be trading based on something called a future earnings multiple.
I learned that JASO is forecast to earn ~$0.40 per share in 2010. I also learned that Chinese solar stocks are trading at anywhere from 10x to 15x their future earnings.
That gives us a pretty good expected trading range of $4.00 to $6.00.
All this using my "R-Track" system.
And look where the stock has traded during the time I've been trading it:
I simply put out a buy recommendation when the stock fell near or below $4.00. And I sold it whenever it offered a decent gain.
Of course, there a few other factors involved. Since it's an energy stock, I always have an eye on oil prices and legislation.
But once you've identified a solid range. . . there's no telling how many times you can trade a single stock for a gain. I'm back in JASO as you read this.
And I've done it with several other stocks. . .over and over again.
