Brokers Stall / Drugs Return
size=”2″ face=”Arial, Helvetica”>Join me, fellow
TradingMarkets.com content providers, and other traders and
money managers at the Trading Markets 2000 conference at the
Venetian Hotel Resort and Casino in Las Vegas on October
13-15, 2000.
face=”Arial, Helvetica”>Chiron
(
CHIR |
Quote |
Chart |
News |
PowerRating), on the
From Highs List, may present an opportunity for covered
calls. You can buy the stock for 54 7/8, and you can sell
the August 55 calls for 4. This represents approximately a
7% return (more than 80% annualized, based on 32 days until
expiration) should the stock be called away.
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The
Nets
(
$IIX.X |
Quote |
Chart |
News |
PowerRating), mentioned recently, remain strong.
Continue to look for buying opportunities in calls and call
spreads here.
Major
drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating) rallied nicely on Monday out of a deep
pullback. This suggests that their uptrend remains intact.
This, combined with the overbought nature of the overall
market, may provide for a buying opportunity in calls and
call spreads on these defensive issues.
Biotech
(
$BTK.X |
Quote |
Chart |
News |
PowerRating), mentioned Friday, appears to be resuming
its uptrend by rallying out of a pullback. Look for buying
opportunities in calls and call spreads here.
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On
the short side, oil
(
$XOI.X |
Quote |
Chart |
News |
PowerRating) and oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating)
remain vulnerable after recently forming rounded tops. Look
for buying opportunities in puts and put spreads here.
The
broker/dealers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) appear to have stalled out
(b) after testing old highs (a). This is not the type of
action one would expect at this juncture. If you are long on
calls, this might be a sign that profits should be locked
in. For the nimble, this may provide a buying opportunity
for puts and put spreads.
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For
you OEX traders, the VIX is hovering around its lowest
levels since March (a). This suggests that there may be an
upcoming buying opportunity in puts and put spreads. As
usual, wait for additional confirmation in signal(s) and/or
price.
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Best
of luck with your trading on Tuesday!
P.S. Reminder:
Protective stops on every trade!