Still A Volatility Play In AMD?
Advanced Micro Devices
(
AMD |
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PowerRating), mentioned
Tuesday night as a potential volatility play, rallied to the top of its recent
trading range on Wednesday (a). This suggests that the move may be higher as
volatility (b) reverts to its mean. As mentioned Tuesday night, should this
happen, this provides the ultimate environment for the long call holder. With that said, the March in-the-money,
at-the-money and slightly out-of-the-money
calls still appear to be fairly priced. Once again, for those with money to burn (seriously, with
two days left, this is a risky trade), the February 25’s, mentioned Tuesday
night, may still provide an opportunity for a gamma play. Just remember, as the
option player’s say: “Gamma get ya.”
The
semis
(
$SOX.X |
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PowerRating), mentioned recently as a big picture bottoming pattern,
rallied nicely on Wednesday. This action suggests that the bottom remains in
place. Look for buying opportunities in calls and call spreads here.
Oil service
(
$OSX.X |
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Chart |
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PowerRating), mentioned Tuesday
night, appears to be attempting to rally out of a pullback. This suggests that its choppy uptrend remains intact. Look for buying opportunities in calls and call
spreads here on any resumption of strength.
On the short side, the major drugs
(
$DRG.X |
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PowerRating),
mentioned Tuesday night, continued to follow through to the downside. Continue
to look for buying
opportunities in puts and put spreads here.
Looking Ahead
Internet basis the IIX
(
$IIX.X |
Quote |
Chart |
News |
PowerRating) appears
to be trying to put in a big picture double bottom. For the nimble bottom
fishers, there may be a bounce play here.
Best of
luck with your trading on Thursday!
P.S. Reminder:
Protective stops on every trade!