The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.
Even though prior Strategy Session suggestions as buyout targets, like BRCD HAIN, have not yet been bought, those stocks have fared very well over the past year since the analysis was made.
We are going flesh out the process for deciding which buyout targets to consider serious buys, even in a bull market with merger deals more common.
When dealing with potential buyout stocks there needs to be a certain degree of discipline adhered to by traders. In other words, traders buying any old chart simply because the firm in question is a logical takeover candidate oftentimes find themselves trapped in a poorly-acting, unhealthy chart with small odds against lucking out on the eventual buyout.
Instead, the idea is to apply a “but-for” test, asking yourself: But-for the potential of a takeover of this firm, would I have bought the stock regardless?
If the answer is yes and you are dealing with a healthy chart, then you are not leveraging yourself entirely to a relatively low probability bet of an imminent buyout at a nice premium. If the answer is no and you are holding an unhealthy chart, then odds are that is what you will continue to be holding.
Updating our list, here are some viable buyout targets which pass the but-for technical test…
Please click here to continue reading
