Ripple Sets Up 20% MoneyGram Winner

A few weeks ago, we recommended War Room members jump on shares of MoneyGram International (Nasdaq: MGI). They had the opportunity to get out of the play for more than 20% in profits!

Here’s the backstory…

MoneyGram is an international money transfer company that was once the apple of Wall Street’s eye. So much so that Alibaba offered to buy the company for close to $1 billion just over a year ago. The U.S. government squelched the deal, and shares of MoneyGram plummeted from the mid-teens to less than $2 per share.

Then, about a month and a half ago, crypto and blockchain startup Ripple bought $30 million worth of MoneyGram shares for $4.10, more than double the market price at the time. The shares rocketed higher.

We waited for an expected pullback. Very few stocks can make a meteoric one-day rise without giving back some… or a lot!

Sure enough, the shares corrected mightily, and War Room members jumped in the fray around $2.60. The shares traded in very volatile fashion for a month leading up to earnings last week. The range was between $1.90 and just under $3 – in a month!

Small caps are fickle that way. They have few outstanding shares, which makes them prone to more volatile trading patterns depending on money flows.

In the days leading up to its earnings report, MoneyGram shares began rallying, and cryptocurrencies followed, despite an overall market that was tanking. In fact, the shares rallied 10% on the Dow’s worst trading day of the year.

MoneyGram announced earnings, and the shares dropped from a previous day close of $2.61 to around $2.

We had our stop loss in place, as we always do for stock trades. It was much lower than our normal 25% because I understood the nature of this beast. I recommended setting it at 50% because I knew that the shares could trade in a wide range, even intraday.

The market opened, and MoneyGram shares dropped. But then they began to climb, and by the end of the day, they closed in the green by more than $0.10. That was a great sign. It meant that the market absorbed all the selling out, and the shares still managed to close higher than they opened.

Action Plan: The next day, War Room members had the opportunity to cash out at over $3 per share for gains of more than 20%!

We’ve got more small cap plays like MoneyGram lined up in The War Room. One that’s especially promising resides in the precious metals sector that has been on fire lately. If you don’t want to miss this trade recommendation, join me in The War Room today!


Topics
More on Trade of the Day
facebook twitter
Popular posts