Volatility Play In AMD?
Advanced Micro Devices
(
AMD |
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Chart |
News |
PowerRating), mentioned in
my Stock Outlook as a potential volatility play (a), may provide an opportunity
for long calls. Under an ideal situation, price would move higher on a
breakout/trend continuation as volatility reverts to its mean. This would
provide the ultimate environment for the long call holder: higher prices and
volatility. With that said, the March in-the-money and slightly out-of-the-money
calls appear to be fairly priced. For those with money to burn (seriously, with
three days left, this is a risky trade), the February 25’s trading at 13/32
could offer a gamma play (one more warning: don’t forget “gamma get
ya”).
Oil service
(
$OSX.X |
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Chart |
News |
PowerRating) appears to be stabilizing
after pulling back. This suggests that its choppy uptrend remains intact. Look for buying opportunities in calls and call
spreads here on any resumption of strength.
The major drugs
(
$DRG.X |
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Chart |
News |
PowerRating), viewed as
defensive issues, failed to rally in spite of Tuesday’s weakness. This has them
failing (b) near their recent highs (a) and suggests that they have the
potential to return to the bottom of their trading range (c). Look for buying
opportunities in puts and put spreads here.
Best of
luck with your trading on Wednesday!
P.S. Reminder:
Protective stops on every trade!