Drugs Pulling Back
face=”Arial, Helvetica”>For those willing to assume a high
degree of risk, Foundry Networks
(
FDRY |
Quote |
Chart |
News |
PowerRating), on the
60-Day Highs On Double Volume List, may present an
opportunity for covered calls. You can buy the stock for 119
13/16, and you can sell the August 125 calls for 13. This
represents approximately a 15% return (more than 120%
annualized, based on 43 days until expiration) should the
stock be called away.
face=”Arial, Helvetica”>
width=”470″ height=”320″>
Major
drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating) sold off slightly, but appear to be
only pulling back after a strong uptrend. Look for buying
opportunities in calls and call spreads here on any
resumption of trend.
width=”470″ height=”320″>
Broker/dealer
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), mentioned Thursday night, continues to hold
up well and still looks like it has the potential to break
out of its recent trading range. Continue to look for buying
opportunities in calls and call spreads here.
On
the short side, the cyclicals
(
$CYC.X |
Quote |
Chart |
News |
PowerRating) remain
vulnerable. Focus on the weakest sectors here, such as
forest and paper products
(
$FPP.X |
Quote |
Chart |
News |
PowerRating), and chemicals
(
$CEX.X |
Quote |
Chart |
News |
PowerRating)
for buying opportunities in puts and put spreads.
Best
of luck with your trading on Monday!
P.S. Reminder:
Protective stops on every trade!