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From Tom Dyson in Palm Beach Current Income: Today, we share with you one of the safest, most profitable stock chart patterns of all time.
The best part is… 99 out of 100 traders can’t see it. That’s our invitation to cash in.
We’re talking about a “Sideways Pattern.”
Take a look at the chart below. It tracks computer chip giant Intel’s (Nasdaq: INTC) share price over 2015.
Intel started 2015 at $36.36 per share. On December 31, shares closed at $34.45.
There were some spikes and declines along the way. But shares more or less ended the year almost right where they began.
Sideways Patterns like this one frustrate ordinary shareholders.
That’s because they look at this chart and see nothing—almost zero gains. They want capital gains… which they rely on for a big chunk of their returns.
They’re frustrated because they don’t know if shares will rise higher, drop, or remain “stuck.”
This frustration impacts option prices… which plays right into our hands as safe option traders.
Frustrated shareholders aren’t sure if shares will eventually break out to the upside… or crash to the downside. That makes them willing to pay us more money to “insure” their shares (through options contracts).
We cash in on this uncertainty time and again.
We do this by making a “low-ball” offer (i.e., selling a put option) to buy shares of a dominant company at a discounted price. In exchange for our offer, we receive cash up front from the option buyers.
Since October 2013, we’ve made 12 trades that focused on Sideways Patterns. All closed as winners. We’ve averaged 17% annualized returns. That’s about 15% higher than our average annualized return of 14.8%.
Inflated put premiums (thanks to frustrated shareholders) are the key to this outperformance.
Remember this, though… Sideways Patterns can be very profitable, but only when paired with companies that are fundamentally sound. These companies are less volatile. We can therefore make money when shares rise, stay the same, or even fall a bit.
That’s why at PBCI we only trade extraordinary companies trading at fair valuations. When we find one locked in a Sideways Pattern, that’s our cue to earn fat, safe income, time and again.
PBCI subscribers can access this week’s trade right here. Everyone else can start putting the Sideways Pattern (and others) to work for you right here.