Seeking Alpha
Value, long/short equity
Profile| Send Message|
( followers)  

There is rarely a sure bet when it comes to the markets these days. There is one institution however that appears to be handing them out on a regular basis. The National Inflation Association, which sends articles on their stock picks to subscribers and takes its own positions in the stock, is that institution. Let's take a look at the effect of their coverage on stocks and how a savvy investor can come out with some rather large profits taking advantage of these price movements.

Synacor, Inc. (NASDAQ:SYNC)

The latest promoted stock is SYNC. The National Inflation Association, which we'll call NIA for short, managed to bring the stock from roughly 6 dollars to around 18 dollars in a matter of months. Here is the chart:

(click to enlarge)

As you can see from the chart, the stock was pushed higher at an abnormally fast rate and then came crashing back down near the levels where it started. This pattern can be found time after time in NIA coverage of stocks. The strategy one takes is simple; short the spikes. If you look at the chart, every time the stock spikes upwards, it comes back down a decent percentage. Those spikes are where the profit lies. It is impossible to tell where the top is in these plays. Shorting and holding will only work assuming you do not get a forced buyout, something that has ruined my own plays personally.

Data from Yahoo Finance.

BroadVision, Inc. (NASDAQ:BVSN)

Before SYNC, NIA covered BVSN. BVSN is in much worse financial shape than SYNC and yet the effect of NIA's coverage sent the stock even higher than SYNC. Here is the chart:

(click to enlarge)

As you can see, the pattern is the same. NIA pushed the stock up from under 10 dollars all the way to 55 dollars within a matter of months. The most important part, however, is that the spikes can all be shorted. Every spike is met with a downward movement. Once again, we find a situation where profit is simply handed to us by NIA.

Data from Yahoo Finance.

Conclusion:

The National Inflation Association gives great short opportunities time after time. The charts all end up looking the same and the strategy doesn't change. Short the spikes and you will be in good shape.

Source: How To Profit Off The National Inflation Association