Anatomy of a Great Trade: A Big, Crazy Win In The Most Unlikely Of Places – ESTA

by | Feb 2, 2024

How can we make 50% in a month?

It’s a good question.

Who wouldn’t want something crazy like that?

If we had to guess, though, what would we choose? 

We’d choose a skyrocketing tech stock that has new-and-improved A.I. infused with more A.I., right?

Not necessarily.

Big wins many times come from strange, forgotten places.

Here’s an example.

On January 3rd, 2024 — about a month ago, as I write this — I ran my Deep Value Scan. This looks for beaten down stocks with certain important technical characteristics.

Keep in mind, this scan has nothing to do with fundamentals. It only looks at technicals to determine good Deep Value possibilities.

And on that January 3rd list was a little stock with the ticker ESTA. Establishment Labs makes body shaping implants and it started falling hard in September of 2023. Then it got hammered again in November 2023. 

But, as stated, it popped up on the scanner as the new year started. It was down at the lower long-term Bollinger Band and had a “fair value” way up above at $60.11.

The price on 1/3/24 was $24.83.

ith “fair value” more than 100% above current price, it might have been worth a try.

What’s happened since then?

It’s up 50% in a month.

And it’s still got a long way to go to reach “fair value” at $60. 

Who knew an unknown company could do such a thing?

Deep Value knew.

And it’s another way to try to catch big winners.

Happy trading,

— Scott Welsh

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