Do you love sexy stocks?
Most investors do.
They love betting on exciting stories.
I get it. There’s big money to be made being early to the next big thing.
But that’s certainly not the only way to crush it in the markets.
This cycle, many of the best performers have been “boring” stocks.
Take Abercrombie & Fitch (ANF). Shares of the apparel company have surged 435% over the past year! That’s more than double what Nvidia (NVDA) has returned over the same period!
In other words, you shouldn’t ignore a stock just because it’s NOT changing the world.
This brings me to my latest Trade of the Week: Dick’s Sporting Goods (DKS).
Dick’s operates one of America's most popular sporting goods chains. There’s nothing revolutionary about the business. But that hasn’t stopped DKS from delivering big returns.
Over the past year, it’s rallied 60%. That’s more than double what the S&P 500 has gained over the same period.
We’re putting on this trade today because DKS appears to be gearing up for its next major leg higher. As you can see below, DKS is painting a multi-week bull flag.
This consolidation pattern typically resolves higher. So, I’m expecting DKS to begin its next major leg up in the coming weeks… possibly sooner.
Source: StockCharts (click to enlarge)
I suggest putting on a starter position today. I believe DKS could hit $325 within the next 18 months.
Exit your position if DKS closes below $185. That gives us a risk-reward ratio of more than 3:1 on this trade.
Action to take: Buy DKS at current market prices.
Risk management: Exit your position if DKS closes below $185.
Justin Spittler
Chief Trader, RiskHedge
