Biotechs Still Vulnerable? (part 3)

  • January 17, 2001
  • Dave Landry

Celgene
(
CELG |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night and on the Pullbacks
Off Lows List, may still provide an opportunity for covered puts. You can
short the stock at 24 7/8 and sell the February 25 puts for 3 1/2. 
This represents approximately a 14% return (more than 170% annualized, based on
30 days until expiration) should the stock be put to you.

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The banks
(
$BKX.X |
Quote |
Chart |
News |
PowerRating), mentioned
recently, still look like they have potential. Continue to look for buying
opportunities in calls and call spreads here on any resumption of strength.

The biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating), mentioned recently, appear to be
resuming their downtrend. Continue to look
for buying opportunities in puts and put spreads here.

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Major drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating)
sold off and closed poorly on Wednesday (a), reversing Tuesday’s rally (b). This
action suggests that its meltdown from highs remains intact. Look for buying
opportunities in puts and put spreads here.

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For you OEX traders, tonight we have two CVR
signals on the Market
Bias Page. This suggests there may buying opportunities in puts and put
spreads.

Best of
luck with your trading on Thursday!

P.S. Reminder:
Protective stops on every trade!

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