28 Mar

My Latest Catalyst Swing Trade Idea Is An Oldie But A Goodie


Price action in the stock market remains choppy, as it’s been the story all week.  However, that doesn’t mean we haven’t been feasting over at Millionaire Roadmap.

We crushed it in UXIN yesterday…(classic fish hook pattern, test drive Jason Bond Picks today)

JL: $2400 on UXIN, thanks Jason!

MH: Taking some UXIN off +20% in the $4’s

YC: 10% profit on UXIN! I’ve made $4000 since joining Roadmap.

Now, on my standard alerts, the goal is to bring back 5-10% over a one to four day period. However, I also like to mix it up and have some “home run” ideas… that I call my catalyst swing trades.

That said, the goal on these trades is to return 20% or more, using a slightly longer hold period. Thus far, these catalyst swing alerts have been nothing short of “on point.”

For example, alerts in  HAIR and AFMD were cheddar…

From time to time I like to share these alerts with you. However, my clients receive about 10 of them a month… Heck, one of them made over $20K from the HAIR alert. If you’d like to receive all my alerts in real-time via text or email, then click here.

That said, my latest alert is one you probably wouldn’t have guessed… it’s an oldie but a goodie… but I think there is some serious upside given its most recent catalyst. Keep reading if you want to learn more.

NYSE: NOK Company Profile

Now, Nokia Oyj (NYSE:NOK) has three potential catalysts on the table. Before we get into the play in NOK, let’s look at the company profile.

Nokia Oyj is one of the largest providers of telecommunication equipment. The company develops network equipment to transmit data over wireless, copper, optical fiber, and microwave mediums, and its products are used by the world’s largest telecommunication service providers. Nokia is headquartered in Espoo, Finland, and it employs more than 100,000 employees globally.

Most traders know Nokia as one of the early cellphones and cellular providers… or their ring tone from back in the 90s. Now, as more competitors entered the mobile device space, NOK’s market share dwindled… while Apple’s and other device providers like Samsung grew.

However, that story is starting to change. In recent years, NOK transitioned itself towards communications infrastructure… and they’ve done it successfully. Now, it’s viewed as one of the leaders in 5G infrastructure network. If you haven’t heard, 5G could be a game changer and is on the verge of a massive breakthrough.

With 5G, users will be able to use mobile applications in real-time. Currently, consumers are still on 4G, which has a delay.

Now, 5G licenses are being assigned, and rollouts of necessary infrastructure follow that. Nokia is receiving an increasing number of orders to execute its rollout, and the company’s future looks brighter.

NOK Buy the Dip?

On March 22, 2019, NYSE:NOK dropped over 7% during pre-market hours. The reason: Nokia reported it was examining transactions at Alcatel-Lucent (which NOK acquired in 2016).

In a U.S Securities and Exchange Commission filing, Nokia stated, “During the course of the ongoing integration process, we have been made aware of certain practices relating to compliance issues at the former Alcatel Lucent business that have raised concerns. We have initiated an internal investigation and voluntarily reported the matter to the relevant regulatory authorities, with whom we are cooperating with a view to resolving the matter. The resolution of this matter could result in potential criminal or civil penalties, including the possibility of monetary fines, which could have a material adverse effect on our business, brand, reputation or financial position.”

This caused the stock to lose $2B in market value. However, we anticipate this was an overreaction, and NYSE:NOK price should rebound.

But why do we think that?

Well, there are three catalysts on the table.

Nokia Catalysts in Focus

At Jason Bond Picks and Millionaire Roadmap, we focus on catalysts, value, and patterns. Basically, we pair catalyst events with chart patterns, and look for an area of value to buy a stock.

That said, let’s look at the catalysts in NOK.

1) More Details on the Compliance Issue.

In Nokia’s statement last Friday, it vaguely indicated that the resolution of the compliance issue could result in penalties… in turn, this caused the stock to drop 7%.

However, the company issued a press release and softened its guidance on the potential impact. NOK noted, The company issues this statement to clarify that the specified investigation is not expected to have a material impact on Nokia. We have seen no evidence that would suggest that criminal penalties would apply in this case, and we believe it is highly likely that any penalties that might apply would be limited and immaterial.”

NOK noted that the text used in the previous communication was a general disclosure and that Nokia’s interpretation of the risk is very low. Moreover, should there be any penalties, they will be immaterial. That said, we’ll look for more news in the coming days that support the potential low impact of this issue and proves the price correction of 7% was an overreaction.

2) More 5G Contracts Assigned

On Monday the following news hit the wires: “Austria’s flagship telecoms group A1 said on Monday it had selected Nokia as its partner for building next-generation 5G mobile networks in the country, continuing a long-standing cooperation with the Finnish equipment supplier”.

This type of news will hit the market more and more in the coming weeks as different initiatives need to decide which 5G supplier they will use. For example, the Pentagon clearly indicates Nokia is in the picture as a potential provider.

Nokia was also chosen as a provider for automotive leaders. Additionally, Germany started auctioning its 5G spectrum auction… and Nokia could be a front runner in the race.

3) Dividend Expected to be Approved

At Nokia’s next annual meeting, a dividend of €0.2 per share will be proposed. Existing investors who are looking for this dividend will probably hold their shares until they get that dividend… not only that, it might attract new investors.

That said, let’s look at the daily chart and the play.

The Play in NYSE:NOK

With all these catalyst events on the table… NOK has a high probability to catch a bounce. However, we need to find an area to buy and develop a trading plan.

Here’s a look at the daily chart of NYSE:NOK price action.

Now, we’re looking to buy NOK under $6, and use the blue trend line of support. If NOK breaks below that blue trend line, we’ll stop out if it breaks below $5.60.

If NOK can break above $6, and hold above that level… a positive catalyst could launch the stock back up to $6.40 before the annual meeting… or it could break its 52-week high at $6.65. We’ll look to exit the position before the dividend distribution date on May 22… unless you’re interested in collecting the dividend too.

Lastly, I’d like to hear what your thoughts are… hit me up on Facebook or Twitter. I look forward to hearing from you.

1 Comment

  1. Teri Barcia

    Your analysis sounds highly probable.
    Thank you


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