THE DREADFUL ANXIETY PANIC SHOW! (UIS,GS)

THE DREADFUL ANXIETY PANIC SHOW! (UIS,GS)

 

We’ve commented several times in this space on the inglorious use of sedatives and anti-depressants that has overtaken such an alarmingly large segment of our population.

 

At last count, we reported that the U.S. was the global leader in prescribing such medications, and the stats still bear it out.

 

Have a look –

We can understand the melancholy-stricken Arctic Isle of Ice requiring drugs (now in second place, behind us); heck, the darned place is pitch black for most of the year.  And sunlight, we know, is a requisite component of good mental health.

 

But the U.S.?

 

There are a great many reasons to account for the overwhelming number of pill popping, nervous nellies in this country, but that’s maybe less worrisome than the accelerating rate at which that number is growing.

 

Consider – over the last twenty years, the number of Americans being prescribed antidepressants has jumped by 500%!  In fact, no other type of drug is more widely dispensed.

 

And if that weren’t alarming enough, things may now be taking a turn for the outright dreadful.

 

Security Sinkhole!

 

News from Unisys (NYSE:UIS), one of the world’s largest IT security firms, tells of a nation that’s increasingly anxious over internet fraud, identity theft, hacking and malware attacks.  The company measures ‘internet anxiety’ levels bi-annually in its ‘Unisys Security Index’ and has just published the latest scores on its website.

 

AND…?

 

We’re quakingly more anxious than we were in 2014 and at our highest level of fear since the survey began back in 2007!

 

Here are the results in a nutshell –

 

  • National security/War/Terrorism was Americans’ number one concern. A full 68 percent were seriously concerned – a 44 percent increase over 2014.
  • Viruses/Malware/Hacking rose to 56 percent ‘seriously’ concerned – 55 percent more than 2014.
  • The overall Unisys Security Index hit 169, an overall ‘serious’ level of concern – up from 123 in 2014, considered a ‘moderate’ level of concern.

 

The index is calculated on a scale of 0 – 300.

 

To be sure, globally, the index has also been rising, as the infographic below shows –

But here at home, that fear appears to be making people increasingly homebound.

 

Consider the following poll results from Gallup, that shows us increasingly less willing to be out in a crowd –

And this, too, from Gallup, that shows a type of “9/11 syndrome” – a fear of planes, foreigners and tall buildings.

 

Have a look –

Where it all leads is not exactly clear, but the trend is veering toward a more insular, vigilant society, and one that our newly elected president obviously tapped into on his way to winning the White House.

 

Is the Fear Justified?

 

We’re not the ones to tell you how to live your life.  The question we all have to ask is whether beyond our front door lies the same street, the same city or town, the same schools and playgrounds that we knew as kids.  If so, then leave it be.  If not, then perhaps there is something to all the personal arms, firewalls, Zoloft and police riot gear that we’ve encountered in the last decade.

 

And perhaps there’s a trade in there, too…

Running Them Down

 

Before we get to this week’s effort, we’ve got two trades to address.  So stay close, please; the dirt is always in the details.

 

The first trade was opened back on the 5th of January in a letter called Becoming an Independent Equity Trader – I.  There, because things had gone slightly awry in an earlier effort, and we were short one lot of Goldman Sachs (NYSE:GS) at $220, we urged you to take the following action:

- Content protected for Normandy Executive Lounge, Option Trader Elite, Executive Lounge members only]

That left us with a credit of $0.65 and both upside and downside protection on the short.  Should GS have climbed higher than 245 or dropped below 215 by their respective expiries, the short would have been closed automatically.

 

As it turns out, the CALL closed worthless back in January, and last Friday the PUT did, too, leaving us short one lot of GS (as before), and a credit of $0.65 in our pockets.

 

But what to do now?  GS now sits at $222.49 amid apparent strength in the financials.

 

The answer to that question lies in our performing the exact same trade as above, but this time with a larger credit.  To wit –

- Content protected for Normandy Executive Lounge, Option Trader Elite, Executive Lounge members only]

What about today’s bet?

 

As we inferred above, were going full fear this week and playing off everyone’s insecurity and need for protection.

 

And we’re looking no further than our small-cap friend from the world of IT preparedness, Unisys (NYSE:UIS), whose stock has seen a nice lift of late, and we believe shows great promise for the future.  Have a look at her daily truck –

The daily paste-up shows a bounce off the long-term moving average (blue circle) just as an RSI oversold reading was cast back in mid-April (red circle).

 

If that’s not bullish enough, the action since then has been solidly higher, and an ascending triangle has formed with resistance at $12.50 (in black).

 

UIS is now trading at $12.43, and a break above resistance would very likely send her much higher.

 

A look at the weekly chart is also encouraging –

After a deeply oversold WEEKLY RSI reading (in red), both RSI and MACD began diverging higher against price (in green) and are now poised to cross above their respective midway waterlines.  That in itself is big-time bullish.

 

All the while, however, a bullish ‘cup and handle’ pattern has also been forming (in blue) on significantly higher volume (in black), an indication that the stock has moved into newer, stronger hands.

 

All of which leads us to believe that we’ll see a tremendous push higher for UIS shares in the intermediate term.

 

With support at UIS $11, and a target price in the $28-32 range, we’re running it as follows –

- Content protected for Normandy Executive Lounge, Option Trader Elite, Executive Lounge members only]

Many happy returns,

 

Matt McAbby

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