By: Scott Redler
Typically after we see a big move in the financials, we then see some money rotate into the private equity stocks. As the economy recovers, we could see a big pipeline for deals. That is the sweet spot of this group. It already seems like every Monday we come in there is another batch of fresh takeovers, and what trader hasn’t noticed the uptick in buyout rumors on a daily basis? These are some positive developments for the private equity space.
Blackstone (BX)
The chart looks ok. The first spot to buy was around $13 when it broke its downtrend. Now it technically has a nice flag pattern and could be a good buy through $15 for new highs later this year.
Fortress (FIG)
The smaller company of the two; however I have had a lot of success trading the range of this stock. I usually buy around $4, then the stock runs to $5.50 and I sell calls a year out. It’s a good way to make 25-30% twice or sometimes three times a year. One of these times the stock will gain traction and my stock will be called away.
RIGHT NOW–I like that pattern a lot. I will buy a ton around $4.50 for a move back to $5. If it can hold up, next time we can get a bigger move to the $6/7 range.
Neither of these are barn-burning trades, but both are ready for a look.
